Leverex's innovative offering for digitized markets offers a collateral efficient infrastructure with transparent pricing, efficient margining, and settlement integrity.
Traditional clearing houses are built around trust and legal recourse where the only eligible participants are large financial institutions. Should one party move into default, margin calls and legal mechanisms guarantee the fulfilment obligations.
In bitcoin, no such legal recourse exists. Leveraged trading and margining models need to resolve that no further collateral can be called upon in the event of margin exhaustion. This "conundrum" has up to now been resolved by requiring double-margin to enter a trade. Half the margin is used to cover profit and loss swings, the other half to cover cascading liquidation risks.
How Leverex works
Leverex's margining model revolutionizes leveraged trading by offering both single margin efficiencies and removes the risk of cascading liquidations. We accomplish this through our innovative model where the risk of each position is defined prior to entering a trade, all trades are settled at the expiry cut-off price, and the net exposure is either rolled or delivered at contract expiry.