Bybit provides two margin modes for Options trading: Cross Margin and Portfolio Margin.

Cross Margin

This is the default mode of Bybit Options. The cross margin mode uses all of a trader’s available balance within the corresponding trading pair to prevent liquidation. 

Taking BTC Options as an example, when all available USDC balances in your USDC Derivatives Account are lower than the maintenance margin, the position will be liquidated. 

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Initial and Maintenance Margin Calculation (Options)

Portfolio Margin 

Portfolio Margin is a risk-based margin policy that’s calculated based on the overall risk of your portfolio. It can be used for USDC Derivatives Accounts, in which long and short positions for Perpetual and Options contracts can be offset against one another. The measurement of risk is calculated by evaluating the range of changes in the mark price and the historical volatility of the underlying asset.

Portfolio Margin Accounts offer the following potential benefits for traders who maintain a balanced portfolio of hedging positions:

• Lower margin requirements
• Increased leverage

To learn more about margin calculations under Portfolio Margin, please visit here.

Note: Portfolio Margin is a risk-based margin applicable to qualified accounts and requires manual activation by users.

Comparison of Cross Margin and Portfolio Margin

Portfolio Margin determines your margin requirements according to the overall portfolio risk in your Derivatives Account. While the Cross Margin is based on individual positions, it calculates the margin of the assets held separately. If you maintain a balanced portfolio of hedged positions, e.g. Bull Call Spread, the Portfolio Margin mode will significantly reduce your required margin.

For more information, please refer to Comparison of Spread Strategies in Cross Margin and Portfolio Margin.