Margin Buffer

A Margin Buffer is the excess collateral held in an account above the maintenance margin requirement. This buffer provides a cushion against market volatility, allowing a position to remain open even if the market moves temporarily against the trader.

The size of the margin buffer is a reflection of the trader's risk tolerance and their expectation of market conditions. A larger buffer reduces the likelihood of a margin call or liquidation but also reduces capital efficiency.

Traders must find the right balance between maintaining a sufficient buffer and maximizing their leverage to achieve their trading goals.