> For the complete documentation index, see [llms.txt](https://docs.imperial.trade/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.imperial.trade/trading/portfolio-margin.md).

# Portfolio Margin

Portfolio margin checks your margin against your **whole cross account**, so a hedge actually reduces the margin you need, instead of every position standing on its own collateral.

### Why it matters

Many assets move together. SOL and BTC, for example, typically have a correlation of about 0.7–0.85. If you are long SOL and short BTC, a market-wide move makes one leg lose while the other gains. A simple margin system ignores that and charges full maintenance on both legs. Imperial gives you credit for it.

Exchanges like CME do this with SPAN, which prices a whole portfolio under a set of stress scenarios. Imperial's system grew out of our work on pair trades and uses a covariance model: a table of how closely each group of assets moves together.

### How it works

Every market belongs to a **group** with an anchor asset, and has a **loading**: how closely it tracks that anchor.

| Group           | Anchor | Members include                                                                 |
| --------------- | ------ | ------------------------------------------------------------------------------- |
| Crypto          | BTC    | ETH, SOL, XRP and other majors; crypto equities (COIN, MSTR, HOOD, CRCL); memes |
| US equities     | SPY    | US500, QQQ, mega-cap stocks                                                     |
| Precious metals | XAU    | PAXG, XAG, XPT, XPD                                                             |
| Oil             | WTI    | BRENTOIL                                                                        |
| FX              | EURUSD | GBPUSD, AUDUSD, NZDUSD; USDJPY, USDCAD and USDCHF (inversely)                   |

For a cross account, Imperial splits each position's maintenance margin into two parts:

* **The shared part** moves with its group. Shared parts of opposite positions cancel out, and positively correlated groups offset each other too.
* **The independent part** is the risk the group can't explain. It is always charged in full.

**Your requirement never falls below 50% of the standard (gross) maintenance margin**, and it never goes above it. Markets outside any group (for example pre-IPO names, rates and NATGAS) are always charged in full.

#### Example

Long $10,000 SOL and short $10,000 BTC on cross margin. Say SOL's maintenance is $240 and BTC's is $120, so the standard requirement is **$360**. With SOL's loading at 0.8 to BTC:

* Shared part: 0.8 × $240 long SOL against 1.0 × $120 short BTC nets to **$72**.
* Independent part of SOL: √(1 − 0.8²) × $240 = **$144**.
* Portfolio requirement: $72 + $144 = **$216**, 40% less than the standard $360.

*Illustrative figures. Live loadings and maintenance rates differ by market.*

### What it does and doesn't do

* **Cross margin only.** An isolated account holds a single position and always pays its own maintenance.
* **Only real hedges earn credit.** Exposure in the same direction is never discounted, and negatively correlated groups never earn credit.
* **It lowers your liquidation threshold, not your opening requirement.** Opening and increasing positions are still checked against the standard [initial margin](https://docs.imperial.space/trading/margin#initial-margin).
* **Closing one leg of a hedge raises the margin on the rest.** Your remaining positions go back to being charged more on their own, which can move your liquidation price sharply.
* **Values are conservative and move slowly.** Correlations are measured daily from 30 days of hourly prices and cut back by a safety haircut. Loadings are capped at 0.95 and correlations at 0.90, and any change phases in over 24 hours.

> **Warning:** Correlations can break down in a crash. Portfolio margin assumes hedges keep behaving like hedges. It does not protect you if they stop.