Template:Initialmargindescription: Difference between revisions

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(Created page with "To be contrasted with variation margin, initial margin (in the ISDA troposphere known as an {{csaprov|Independent Amount}} is an amount of margin you hold in excess of...")
 
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To be contrasted with [[variation margin]], [[initial margin]] (in the ISDA troposphere known as an {{csaprov|Independent Amount}} is an amount of margin you hold in excess of current [[mark-to-market]] [[exposure]] to cover the risk that the market moves suddenly, and your [[counterparty]] implodes, dramatically, before you have a chance to make a further [[variation margin]] call.
To be contrasted with [[variation margin]], [[initial margin]] (in the ISDA troposphere known as an {{csaprov|Independent Amount}}) is the amount of [[margin]] you hold ''in excess of'' current [[mark-to-market]] [[exposure]]. You hold it to cover the risk that the market moves suddenly, and your [[counterparty]] implodes, dramatically, before you have a chance to make a further [[variation margin]] call. <br>