Equity Buffer Ratio

The Equity Buffer Ratio is a metric that tracks the distance between a trader's current account equity and the maintenance margin requirement. A higher ratio indicates a safer position with more room for market fluctuations, while a lower ratio signals increased risk of liquidation.

Traders use this ratio to determine how much market movement they can withstand before needing to adjust their positions. It is a dynamic value that changes with every tick in the market price of the underlying assets.

By monitoring this buffer, traders can effectively manage their leverage during periods of high volatility. It is a fundamental metric for maintaining long-term solvency in derivative markets.