Template:Deliveryandreturnamounts: Difference between revisions

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 ===={{{{{1}}}prov|Return Amount}}s====
 Basically the converse of a {{{{{1}}}prov|Delivery Amount}}. In this case you deduct the {{{{{1}}}prov|Credit Support Amount}} from the {{{{{1}}}prov|Credit Support Balance}}.
-====What about in-flight {{{{{1}}}prov|Credit Support}} deliveries?====
+{{in-flight credit support|{{{1}}}}}
-So yesterday you met a [[margin call]] by delivering a [[bond]] the standard [[settlement cycle]] for which means it won’t arrive till the day after tomorrow. How is this “in-flight collateral” treated for the purpose of today’s [[margin call]]? It’s treated as having already been made. However, if your [[counterparty]] fails in the meantime (before the [[bond]] has settled, and assuming ultimately it never does), it would count as an {{isdaprov|Unpaid Amount}} which would factor into your [[Close-out Amount - ISDA Provision|close-out calculation]].
-At first blush, this seems an odd result, but the risk is a time value risk associated with the collateral, not a counterparty risk per se. You accepted it when you agreed to {{{{{1}}}prov|Eligible Credit Support}} with a long a [[settlement cycle]] in the first place. If you don’t want that time-value risk, don’t agree to collateral with a long [[settlement cycle]].
 ====Picturesque speech====
 ''Bonus learning for free: In arithmetic, a sum being ''subtracted'' is the “[[subtrahend]]” and the sum it is being subtracted from is the “[[minuend]]”.'' <br>