> For the complete documentation index, see [llms.txt](https://optifi.gitbook.io/optifi/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://optifi.gitbook.io/optifi/optifi-in-depth/margin-requirements/portfolio-margin-calculations.md).
# Portfolio Margin Calculations
The total margin requirement has three main components:
[Stress Requirement](#stress-requirement) + [Option Value Add-On](#option-value-add-on) + [Liquidity Adjustment](#liquidity-adjustment)
### Stress Requirement
Portfolio margin is calculated by market stress approach – for each user, changes in OptiFi position values are calculated under different stress scenarios on the underlying asset. Currently, market stress scenarios are set from -30% to +30%.
For each instrument, the profit or loss can be calculated by multiplying its long (+) or short (-) position with each stress. The **most severe stress** for the user in terms of loss provides the collateral requirement on a portfolio basis to support open positions.
For example, we check positions separately at first: If you spend $1,489 to long a BTC-38000-1w-Call, the most severe stress is -$1,489 when the BTCUSDC spot price drops 30%. If you receive $198 to short a BTC-43000-1w-Call, the most severe stress is -$6,364 when the BTCUSDC spot price rises 30%.
However, OptiFi considers two positions as a whole strategy. Hence the most severe stress becomes -$1,292 when the BTCUSDC spot price drops 30%. It means:
**Stress Requirement** = **-$1,292**
### Option Value Add-On
In addition to collateral for stresses, Option Value is added to account for intrinsic and premium values on top of [stress requirement](#stress-requirement) to ensure that there are enough funds to settle or close positions. OptiFi sets a minimum of net intrinsic or net premium value for each user:
Option Value Add-On = min ( ∑〖 Position x Option Intrinsic Value〗 , ∑〖Position x Option Premium〗)
Please note, that option value add-on here is a negative number, which corresponds to premiums or intrinsic value owed by an account in short positions.
According to the formula above, if you long a BTC-38000-1w-Call at $1,489 and short a BTC-43000-1w-Call at $198, when the current spot price is $38,000:
**Option Value Add-On** = min ( ∑〖 $0 + $0 〗, ∑〖 $1,489 - $198 〗) = min ( $0 , $1,292 ) = **$0**
### Liquidity Adjustment
Finally, liquidity adjustment is made to account for settlement of closest maturity contracts to ensure that there are enough funds for settlement of maturating positions. A liquidity add-on is calculated for the closest maturity contracts only:
Liquidity Adjustment = (Time to maturity x 2/365 + 1) ( ∑〖Position x Option Intrinsic Value〗)
Please note that liquidity adjustment is added only in cases where Net Option Intrinsic value is negative.
Per the case above, if you long a BTC-38000-1w-Call at $1,489 and short a BTC-43000-1w-Call at $198, when the current spot price is $38,000:
**Liquidity Adjustment** = (7\**2/365+1)*($0) + (7\**2/365+1)*($0) = $0 + $0 = **$0**
In summary, if you long a BTC-38000-1w-Call at $1,489 and short a BTC-43000-1w-Call at $198, when the current spot price is $38,000:
**Total margin requirement = -$1,292 + $0 + $0 = -$1,292**
If you have $5,000 USDC in Account Equity, the Available Balance = $5,000 - $1,292 = $3,708
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