BitWell Options Product Margin and Liquidation Rules

1.Margin required to open a call option sale

Max(

Option fee income + M * contract multiplier * index price – option dummy,

Option fee income + N * Contract multiplier * Index price

)

And

Call option dummy = Max (strike price – last price of the underlying, 0) * contract multiplier

M, N values: M=25%, N=12%

2.Margin required to open a put option sale

Max(

option fee income + M * contract multiplier * index price – option dummy.

Option fee income + N * Contract multiplier * Strike price

)

And

Put option dummy = Max (Underlying Latest Price – Strike Price,0) * Contract Multiplier

M, N values: M=25%, N=12%

3.Maintenance of margin and liquidation of positions

The maintenance margin is 30% of the opening margin.

The system will mark to market on the margin according to the position. When the margin is lower than the maintenance margin, the system will first use the available funds in the option account to make a margin call, up to the opening margin; when the available funds in the option account are insufficient to make a call to the maintenance margin, a margin call message or email will be sent to the user. If the user does not transfer the pending call amount to the options account within 10 minutes, liquidation will be happened.

When liquidation is triggered, a partial liquidation will be performed first, and the liquidation will stop until the user’s margin returns to the required maintenance margin level. If bankrupt occurs, the bankrupt part will be covered by the insurance fund. If the insurance fund is insufficient to cover the full bankrupt amount, the remaining amount will be socialized with all profiting users at the time of that settlement.


Click and check BitWell Options Contract Specifications

Click and check Trading Fee Schedule on BitWell


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