Eligible institutional clients can post a single collateral pool and margin their whole book, with positions and collateral assessed in one risk measure.
STS Digital, the Bermuda Monetary Authority (BMA) regulated principal trading firm specialised in institutional digital asset derivatives, spot trading and structured products, launched cross-asset portfolio margining for eligible institutional clients across its OTC business in spot, options and structured products, following completion of the BMA’s material change process under the Digital Asset Business Act 2018.
Portfolio margin is long established in listed derivatives and prime brokerage, where a client’s requirement reflects the risk of the whole book rather than the sum of its individual line items. STS Digital has extended that approach across digital assets. Positions and posted collateral are assessed together within a single risk measure, including the case where collateral value and position value move adversely at the same time. Exposure is netted across assets where risk genuinely offsets, and held separate where it does not.
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For clients, that means one collateral pool rather than collateral fragmented by underlying. Tokens already held can be posted as margin against positions in other assets, subject to the firm’s eligibility and valuation rules, and risk-reducing structures are recognised as such rather than margined as though they were unhedged. Institutions active across multiple digital assets no longer need to fund the same risk twice.
“Institutions moving into digital assets are not asking us for more leverage. They are asking for their collateral to behave the way it does everywhere else in their business,” said Maxime Seiler, CEO of STS Digital. “If you run a book with a prime broker or on a listed derivatives exchange, you expect margin to reflect the risk of the portfolio, not the sum of its parts. That is what we have built, and it is live for eligible clients now.”
The framework operates within STS Digital’s established collateral and prudential risk policies. It is available only to eligible institutional and professional clients who meet the firm’s onboarding, documentation and risk assessment requirements, and is not offered to retail investors.
“The hard part of this product is not the trading, it is the risk model behind it,” said Gideon Hyams, Co-Founder and Chairman of STS Digital. “Netting risk across assets is easy to describe and difficult to do conservatively. Building it to an institutional standard is the hard part and it is what we have done. ”
The offering spans spot, vanilla and exotic options and structured products, delivered through portal, API and voice channels. Institutions interested in eligibility can contact the firm directly.
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