On Kyan, margin is divided into two categories: Initial Margin (IM) and Maintenance Margin (MM).
Initial Margin (IM): This is the upfront capital you must have to open a new position. It reflects the risk of entering into a trade. If your equity is below the required IM, you cannot increase your exposure.
Maintenance Margin (MM): This is the minimum amount of equity you must keep in your account to hold your positions. If your equity falls below MM, the system will begin liquidation to protect you and the exchange from further losses.
Key Differences
IM is about starting a position.
MM is about keeping a position open.
Example
Suppose you want to open an ETH call option.
The system requires 1,000 USDC Initial Margin to take the trade. If you don’t have enough equity, you cannot enter.
Once the trade is open, the Maintenance Margin is 700 USDC. As long as your equity stays above that, you’re safe. But if your equity falls below 700 USDC, liquidation begins.
Together, IM and MM ensure that traders can pursue leveraged strategies while maintaining the integrity of the platform.