# Collateral & Margin System
## **Collateral Management**
Symmio supports two distinct margin systems to manage risk and ensure solvency across counterparties:
### **1. Isolated Margin**
* Used exclusively for **Party A option purchases**.
* Party A’s funds are deposited into an individual **isolated balance**, managed per user.
* **Party B** is responsible for maintaining sufficient collateral in their own isolated balance to cover the **total unrealized PnL** of all open positions with all Party As.
* The required collateral is determined by the **loss coverage ratio**, which defines what percentage of unrealized losses must be backed by actual funds.
* Solvency checks for Party B are performed **only** against their isolated balance, aggregated across all counterparties (not per Party A).
* If Party B’s available balance falls below the required threshold, liquidation is triggered.
* The **Scheduled Release Balance System** governs how and when deposited funds become available, introducing timed delays for security.
### **2. Cross Margin**
* Available for **both buying and selling** by **Party A**.
* Each Party A and Party B maintains a **dedicated cross balance per counterparty pair**.
* This model is used for:
* **Party A’s maintenance margin** (when selling options).
* **Party B’s loss coverage** (when Party A is the buyer).
* Funds can be allocated from the isolated balance into a cross balance specific to a trading counterparty.
* Solvency and liquidation are **pair-specific**—they apply only to the trades and margin balances between a particular Party A and Party B.
* Party A must maintain enough maintenance margin in their cross balance with Party B to support short positions.
* Party B must allocate sufficient funds in the cross balance with Party A to cover the required unrealized PnL.
* A dedicated **reserve balance** is introduced for Party B:
* Acts as a fail-safe collateral source in critical situations.
* Can be used to top up a cross balance and **prevent liquidation** if the account is at risk.
## Scheduled Release Balance System
The Scheduled Release System is a smart contract-based balance management system that provides secure fund handling with time-delayed releases and multi-counterparty support. The system supports both isolated and cross-margin trading models with sophisticated locking mechanisms.
This system :
* Controls fund release and transfers between parties
* Implements security delays to prevent immediate fund availability
* Mitigates risks associated with rapid fund movements
* Provides different functionality for isolated vs. cross margin systems
**Balance Types**
1. **Isolated Balance**: User's main balance pool which used in isolated solvency checks
2. **Cross Balance**: Per-counterparty balance for cross-margin operations and solvency checks
3. **Scheduled Balance**: Time-locked funds awaiting first release
4. **Transitioning Balance**: Funds in second phase of release process
**Margin Types**
* **Isolated Margin**: Uses scheduled release mechanism with time delays
* **Cross Margin**: Direct balance operations without delays
### **Isolated Balance Functions**
`instantIsolatedAdd()`
* Immediately adds funds to party's isolated balance
`isolatedSub()`
* Subtracts funds from isolated balance
`isolatedLock()` / `isolatedUnlock()`
* Lock/unlock portions of isolated balance
### **Cross Balance Functions**
`allocateBalance()`
* Transfer funds from isolated to cross balance for specific counterparty
`deallocateBalance()`
* Transfer funds from cross balance to isolated balance
`crossLock()` / `crossUnlock()`
* Lock/unlock portions of cross balance
### **Scheduled Release Functions**
`scheduledAdd()`
* Add funds with time-delayed release. This delay is because of security issues.
`subForCounterParty()`
* Subtract funds from balances for counterparty not just the isolated balance.
### **Release Mechanism**
**Time Intervals**
The system uses two release intervals:
1. **Release Interval 1**: Scheduled Balance → Transitioning Balance
2. **Release Interval 2**: Transitioning Balance → Isolated Balance
**Sync Function**
The `sync()` function must be called to progress funds through the release intervals. This function:
* Checks elapsed time for each balance bucket
* Moves funds from Scheduled to Transitioning when interval 1 expires
* Moves funds from Transitioning to Isolated when interval 2 expires
