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What is collateral, margin, usage, and buying power?
What is collateral, margin, usage, and buying power?
Updated over a week ago

Collateral:

  • Refers to the tokens that a trader deposits into their trading account as a security against potential losses. It serves as a guarantee to cover any adverse price movements and ensures that the trader can meet their margin requirements.

Margin usage:

  • Indicates the portion of a trader's collateral that is currently tied up or used as margin to open and maintain their derivative positions. It reflects how much of the available collateral is actively deployed in trading activities and may vary as positions fluctuate in value.

Buying power:

  • Represents the amount of capital a trader has available to open new positions or increase the size of existing ones. It is determined by subtracting the margin currently in use from the total collateral, allowing traders to assess their capacity to enter new trades within their risk tolerance and margin requirements.

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