Leverages & Availability of Liquidity

The fundamental mechanism of Zomma’s liquidity pools that offer different leverages is based upon the correlation of the base leverage and the specific leverages that each pool is offering. The available liquidity, as mentioned above, that is used for quotation is calculated by the ratio of base leverage and the leverages of the specific pool. The leverages of Zomma's pools is base upon the % of liquidity reserved. When there is no available liquidity, the leverage is approximately 10x, calculated simply as 10% of the initial margin. However, with a 50% of reserved liquidity, the leverage is approximately 5x.

Available liquidity uses for quotation can be understood as the difference of total liquidity and the reserved liquidity. (Available Liquidity = Total Liquidity — Reserved Liquidity) Therefore, the higher the leverages a pool offers, the lesser the amount of liquidity reserved in the pool, using up most of liquidity for quotes. Conservative Pool Available Liquidity (for quotation) 70% Liquidity Reserved 30% Risk- Low Generally, the pool undertakes a conservative approach where the counter positions shared and owned are greatly less than balanced & aggressive but larger than the conservatives, liquidity & funds are locked by a relatively large proportion in the pool. Stable Pool Available Liquidity (for quotation) 80% Liquidity Reserved 20% Risk- Moderate Generally, the pool undertakes a rather stable approach, the counter positions shared and owned are moderate, liquidity & funds are used mostly for quotations. When the pool serves to sell options, an initial margin of 10% is requested, allowing only partial collateral with leverages to maximize utilization of capital.