Margin requirements
Before any trade, the taker posts initial margin (IM): collateral that sits against the position for its whole life. CRX sizes it to the ISDA SIMM standard: the same volatility-scaled, ten-day method banks use to margin uncleared FX between themselves, with a hard floor per currency pair. Time: ~4 min.
Why post margin at all?
Margin is posted because it covers the worst likely move before a trade can be unwound. A close-out is paid from collateral already on the table, never chased after the fact.
The taker and CRX each put up a deposit before the trade binds. The deposit is sized to the worst the rate is likely to move over the roughly two weeks it could take to close the trade out if one side stops paying. If a move goes against the position, the deposit covers it. When the trade settles cleanly, the deposit comes back.
There is no fee, and no borrowing. The margin is the taker's own collateral, held and returned. For why both sides post and how the buffer works moment to moment, see The Margin Engine (~3 min).
How much is posted?
The amount posted is the larger of two numbers: a volatility term and the pair's floor.
imBps = max( vol term , the pair's floor )
(bps = basis points; 100 bps = 1% of the trade.)
- The vol term =
250 · the pair's daily volatility (%) · √10. The√10is the margin period of risk: ten business days, the time it could take to close a trade out when a party is left short. Ten days, volatility-scaled, is the ISDA standard horizon. The vol figure comes live from the price oracle, making the term rise and fall with the market. - The floor is each pair's hard minimum (table below): gap-risk insurance for a currency whose quiet days hide a sudden break that realized volatility cannot price in until after it happens.
Whichever is larger is what gets posted. The volatility term governs in normal and stressed markets; the floor catches the pair that looks quiet right up to the moment it jumps.
Worked example. A free-floating major moving 0.5% a day posts 250 · 0.5 · √10 ≈ 395 bps, about 3.95% of the trade, well above its 100 bps floor. A tightly pegged currency that barely moves posts its floor instead, because steady realized volatility would otherwise underprice the break risk.
NoteThe maker posts less on the volatility term. CRX uses a coefficient of 250 for the taker and 125 for the maker. When a pair's floor binds, both sides post the same floor.
Why does each currency carry a different floor?
Each currency carries a different floor because gap risk is not the same in every currency. A free-floating major moves continuously. Its volatility term already sees the risk and the floor stays thin. A managed or pegged currency sits still for months and then steps — a devaluation realized volatility cannot price until after the fact — and it carries a thick floor as insurance.
The table below shows the floors, tiered by gap and devaluation risk:
| Tier | Pairs | Floor |
|---|---|---|
| Stablecoins | USDC/USD | 0.25% |
| USDT/USD | 0.50% | |
| Tight peg | USD/HKD | 0.75% |
| Majors | EUR/USD, USD/CAD, USD/SGD | 1.00% |
| GBP/USD, USD/JPY, USD/CHF, AUD/USD, NZD/USD | 1.25% | |
| USD/NOK, USD/SEK | 1.50% | |
| Wider floats | USD/MXN, USD/CNH, USD/KRW, USD/TWD | 2.50% |
| USD/ZAR, USD/BRL | 3.00% | |
| LatAm (session) | USD/CLP, USD/PEN | 4.00% |
| USD/COP | 5.00% | |
| Managed / tail | USD/INR, USD/IDR | 8.00% |
| USD/PHP | 12.00% | |
| USD/TRY | 15.00% | |
| Unlisted | (fallback) | 12.00% |
An unlisted pair is treated as a managed currency until it earns a lower, explicit floor. The floor is the minimum the engine will ever post; the volatility term lifts the number above it as the market warrants.
Can less be posted?
No. Every firm posts the same standard margin, with no application and no credit tiers: the firm signs the standardized ISDA once at onboarding and trades within minutes, even with no banking history. The pair sets the rate, not the balance sheet.
This is the whole credit policy. No one's creditworthiness is relied on, because every position is fully collateralized — and when collateral runs short, the risk engine closes positions.
The Risk Engine · ~3 minthe three moving parts, and what a close-out reaches
What happens when the market moves against the position?
A routine move asks nothing of the trader. Variation margin settles the running P&L continuously, and the margin engine pays it from collateral already in the system: gains on the firm's other positions first, then the margin account.
A position's account value is the initial margin, plus or minus where the rate has moved since the lock. That value is the position's margin health, shown live on the hedge itself: full at the initial-margin line, falling as a move runs against the position, with the maintenance margin — 60% of initial margin as the standard term, signed — as the line that closes it.
A call the portfolio and the margin account cannot cover opens a 48-hour cure window to fund the margin account. Gains on the firm's other positions keep counting toward the call for the whole window, and the margin account can be funded at any time, at any level. The control sits on the hedge itself: Manage a position (~3 min).
Only below the maintenance margin, or at the end of an unmet window, does the risk engine act: it closes the position out against the margin already posted, never against the trader personally, and never reaching the trader's other hedges. The posted margin is the most a close-out can reach.
The Risk Engine · ~3 minwhat the risk engine closes, and who pays
Is this normal, and is the margin safe?
The answer to both is yes: this is how the business is run, and the design protects the collateral rather than risking it.
- It is the industry standard. The ISDA SIMM method, volatility-scaled over a ten-day margin period of risk, is what regulated institutions use to margin uncleared derivatives with each other. CRX applies the same standard, with a per-pair floor added on top.
- It is the trader's own collateral. Margin is neither a fee nor credit. It locks per position — never lent, never reused, never mixed with profit — and it is returned when the trade settles.
- Both sides post. Each side of the trade puts up margin. A close-out is paid from the closed-out party's own collateral, never from the other side's. The book is net-0 by construction: no one carries a directional bet against the trader.
NoteMargin is never unsecured credit. Every position is fully secured to the IM the engine sets. No position ever runs a deficit, and no one lends anything.
For the eligible assets and the matching rule, see Collateral (~3 min).
Next: Withdraw (~1 min). Move free collateral and won profit back to the wallet.