> For the complete documentation index, see [llms.txt](https://risk.infinity.exchange/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://risk.infinity.exchange/portfolio-margin/initial-margin-and-health-score.md).

# Initial Margin & Health Score

## Initial Margin (IM)

Initial Margin (denoted, "IM") is the value of Assets set aside in your NAV to initiate a new lending or borrowing position. Once the position has been created, your newly created position forms part of your NAV, which is subject to [Maintenance Margin](/portfolio-margin/maintenance-margin.md), on an ongoing basis.

Currently, IM is set at 1.5 times your MM, or *IM = 1.5 x MM*.

* Note: the 1.5 figure is not fixed, and may change (up or down) depending on market conditions
* IM expressed as a percentage (denoted, "IM%") is IM divided by NAV, or *IM% = IM / NAV*

After your new position is created, there is a negligible impact on your recalculated NAV (denoted "NAV*after*"), since your newly created position is valued at par (excluding small slippages), but thereafter have a direct impact on your MM (and thereby IM, which is a multiple of MM):

$$
NAV\_{before}=NAV\_{after}=NAV\IM\_{after}=IM\_{before}+ \Delta IM\ MM\_{after}=MM\_{before}+ \Delta MM
$$

In order to initiate a new position, the newly created position must satisfy the following criteria post facto:

$$
NAV\_{after}>IM\_{after} \iff \Delta IM\<NAV - IM\_{before}
$$

It's important to note that, if your Trading Account's margin is less than IM and greater than MM, you would not be able to initiate any new positions, at the same time you would not be liquidated (until your margin drops below MM). In order to initiate new positions, any or a combination of several non-exhaustive factors could occur to bring your margin higher than IM:

* Transfer-in Cash to your Trading Account
* Reduce your outstanding lending and borrowing positions (as their aggregated present value is negatively correlated with the delta between your NAV and StrNAV)
* Favourable move in prevailing market rates, thereby reducing the impact on your StrNAV (and resulting in its lower delta to your NAV)

## **Health Score (H/S)**

Health Score (denoted, "H/S") is a numeric representation of your assets and liabilities.

* Health Score is your NAV divided by MM, or *H/S = NAV / MM*
* Liquidation of your Trading Account occurs whenever your H/S is equal or lower than 100%


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