# Margining

The selling of under-collateralized options could create risks for LPs that are lending their liquidity  to LTsthat may not have posted sufficient collateral to cover their margin requirements. To eliminate  this risk, the margin and liquidation engine secures the LPs by liquidating positions that could cause  unrecoverable LT losses. &#x20;

Accordingly, when an LT enters a trade, OpusTreasury queries their collateral position to ensure  that sufficient margin is available to enter the trade. As an LT’s position changes over shifts in  underlying price, volatility, and time, OpusTreasury will continuously update, net, and determine  required collateral. Margin collateral is netted and managed on an individual portfolio level enabling  LTs to deploy capital more efficiently. &#x20;

Margin and liquidation engine requirements will be initially set as follows:&#x20;

* For Long Positions: min(100% \* mark price, 10% of spot)&#x20;
* For Short Call Positions: max((20% - OTM Amount/spot)\*spot), 12.5%\* spot)&#x20;
* For Short Put Positions: min(max((20% - OTM Amount/spot)\*spot,12.5%\*spot), 50% of strike)&#x20;

Opus reserves the right to change margin requirements as market conditions warrant.

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