Risk Based Margining

Capital efficiency is on the short list of priorities for any serious trader. We employ a state of the art, Risk Based Scenario Margining system to define collateral requirements in proportion to a user's entire position risk. Concretely, this means that each Optio user's position is continually monitored in real-time using underlying and volatility scenario scanning methods to compute capital requirements. The risk engine captures the risks inherent in buying and selling options as they evolve over time. Thus, entering into an options spread is much more capital efficient than selling naked options.

In addition, Optio is able to offer leverage on open orders. Each Optio market participant must have enough collateral to satisfy risk requirements, however we recognize that treating open orders the same as filled positions belies capital efficiency. Optio allows market makers a leverage factor on open orders and automatically cancels or reduces orders that would become impossible to fully fill once a collateral consuming trade is made.

The maximum Optio open-order leverage factor is currently 10 : 1. This value may be adjusted in real time per Optio management.

Market makers don't know ahead of time which of their resting orders will fill, so Optio gives them the ability to have working orders in excess of posted collateral. When an order is filled, Optio automatically adjusts open orders to reflect new excess equity.