1/ Making sense of Margin on Vertex.
Vertex’s cross-margin framework is designed to improve capital efficiency 🏔️
Understanding Vertex’s design & terms like margin usage, funds available & how to utilize will help you as a trader.
Let’s get up to speed on what it all means 👇
2/ This short thread is a summary of our recently published blog on all things Margin.
To learn more about these important concepts and terms, we suggest giving it a read: blog.vertexprotocol.com/making-sense-of-margin-understanding-the-terms-on-vertex-2/
3/ Vertex’s Cross-Margin design.
On Vertex, your portfolio is your margin - this means that users can utilize various assets as collateral, including pnl. - Margin is shared across positions.
4/ Why is this beneficial to traders on Vertex?
Cross-margin provides traders with greater flexibility and capital efficiency through:
• Position offsetting - losing position’s risk can be mitigated by winning positions.
5/
• Multiple Collaterals - Traders can use various collateral as margin for their positions, including spot and LP positions.
• Diverse trading strategies & management - such as delta-neutral & spread trading
6/ Let's look at account info available on the app.
➡️ Margin Usage:
The percentage of an account’s initial weighted collateral being used by initial margin requirements.
➡️ Funds Available:
The collateral an account has to trade with. Also known as available or initial margin.
7/ Terms (continued)
➡️ Account Leverage:
The multiplier of how much you're leveraging assets for existing positions & liabilities
➡️ Liquidation Risk:
How close an account is to liquidation - (Maintenance Margin Usage, the amount of maintenance margin being used by positions).
8/ Terms (continued)
➡️ Funds Until Liq:
The collateral an account has until it is eligible for liquidation.
$0 = liquidation (riskiest positions will be liquidated until this is above $0)
9/ On Vertex, an account can have a variety of assets and liabilities
Each asset and liability is given 2 weighted values (initial and maintenance weights).
This will determine the collateral and margin requirements an account has to trade and not be liquidated.
10/ Interested in learning more about Vertex’s terms and design? Check out our linktree to get started: linktr.ee/vertex_protocol
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