# Margin Model

### Initial margin

Initial margin is the minimum amount required for executing a position

* Buy option call/put : `Buy maintenance margin($)*(1+k) + open fees`
* Sell put option : `Maintenance margin * IMR factor`
* Sell call option :`Maintenance margin * IMR factor`

### Maintenance margin

Maintenance margin is the minimum amount required to be maintained in the portfolio to keep the position opened

* Buy option call/put : `Initial premium price($) + close fees (0 for liquidation calculation)`
* Sell put option : `Max(b * spot, b * Mark Price of the premium) + Mark Price of the premium`
* Sell call option:`b* Spot price + Mark Price of the premium`

Where a and b are margin variables defined per asset : 

<table><thead><tr><th>Market</th><th>Initial margin factor (a)</th><th width="182.1796875">Main. margin factor (b)</th></tr></thead><tbody><tr><td>$wETH</td><td>1.25</td><td>0.075</td></tr><tr><td>$wBTC</td><td>1.25</td><td>0.075</td></tr><tr><td>$HYPE</td><td>1.25</td><td>0.1</td></tr><tr><td>$SOL</td><td>1.25</td><td>0.1</td></tr></tbody></table>

<br>

### Open position margin checking

In order to open a position, we have to check and make sure that the current financial value of user portfolio is above or equal to the **new position initial margin** added, following the formula below:

**a\* token amount in portfolio \* CF + max\_pnl\_factor\* total unrealized Profit - total unrealized loss - debt - current position sell MM - current position buy MM - liquidation fee >= new position IM**

### Liquidation margin checking

In order to check if the user is liquidatable or not, the current account balance - losses - guaranteed maintenance margin should be always above 0 , **which means he’s able to pay his full deb**t, so in order to define a user as not liquidatable he must maintain the formula below:

**b\*Token\*CF** + **max\_pnl\_factor\* total unrealized Profit - total unrealized loss - debt - current position sell MM - liq fees >= 0**

### Withdrawal margin checking

In order to allow user to get withdraw money from portfolio, we need to make sure that the new portfolio balances of his portfolio - the losses and the guaranteed margin is above 0 , or else we need to revert the transaction, so this formula must be always maintained :

**c\*new token dollar amount after withdraw\*CF + max\_pnl\_factor\* total unrealized Profit - total unrealized loss - debt - current position sell MM - current position buy MM - liquidation fee >= 0**

| Paramater   | Value |   |
| ----------- | ----- | - |
| a           | 1     |   |
| b           | 1     |   |
| c           | 0.85  |   |
| pnl\_factor | 0.4   |   |