Margin Methodology - July 17, 2025
Bitnomial Clearinghouse, LLC
For definitions of capitalized terms not defined here, refer to the Bitnomial Exchange, LLC & Clearinghouse, LLC Rulebook.
Guaranty Fund
Bitnomial Clearinghouse, LLC (the "Clearinghouse") maintains financial resources sufficient to cover the simultaneous default of the Clearing Member with the largest exposure (cover one). The Guaranty Fund is:
- Clearinghouse contribution of $5,000,000
- Held entirely in USD contributed by the Clearinghouse
- Back-tested and stress-tested under extreme but plausible scenarios
Default Management Waterfall
| Step | Source of Funds/Action | Description | Amount/Limit |
|---|---|---|---|
| 1 | Defaulting Clearing Member Assets | Use assets of the defaulting Clearing Member. | As necessary (no set limit) |
| 2 | Guaranty Fund | Apply the Clearinghouse's Guaranty Fund. | $5,000,000 |
| 3 | Non-Defaulting Clearing Member Assessments | Assess up to $1,000,000 of the remaining shortfall and Guaranty Fund replenishment, based on each Clearing Member's pro rata share of Margin requirements in relation to the Clearinghouse's aggregate Margin requirements. | Up to $1,000,000 |
| 4 | Contract Extinguishment | The Clearinghouse may partially or fully extinguish contracts as necessary. | As necessary (no set limit) |
Margin Methodology
- Margins are set to cover 99% of expected price movement over a historical time period.
- Portfolio margining uses CME SPAN® methodology to estimate overall portfolio risk over a 1-day period.
- Contracts cleared include all those listed by Bitnomial Exchange, LLC.
* CME SPAN® is a registered trademark of Chicago Mercantile Exchange, Inc.
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