Definition

Initial Margin Requirement

Meaning ⎊ The minimum collateral value required to initiate a leveraged position or borrow assets on a protocol.
Greeks.liveApril 12, 2026

Initial Margin Requirement

The initial margin requirement is the amount of collateral a user must deposit to open a leveraged position or borrow assets. It is expressed as a percentage of the total position value and acts as the entry barrier for leverage.

By requiring a significant initial deposit, the protocol ensures that the user has skin in the game and provides a cushion against immediate price moves. This requirement is typically higher than the maintenance margin to ensure that the position does not immediately fall into a state of potential liquidation.

It is a primary tool for controlling systemic risk by limiting the amount of leverage that participants can take on. Higher initial margin requirements lead to safer, less volatile markets.

Setting this parameter is a key function of protocol governance.

Initial Vs Maintenance Margin
Entry Price Dependency
Anchoring Bias
Implementation Shortfall
Volatility Buffer
Capital Protection
Initial Margin Ratio
Secondary Market Trading

Glossary

Initial Margin Requirement

Requirement ⎊ The initial margin requirement, within cryptocurrency derivatives and options trading, represents the upfront collateral demanded by an exchange or clearinghouse to mitigate credit risk associated with an open position.