Excess margin: Difference between revisions
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{{a|pb|}}''Careful not to confuse with [[margin excess]]''. | {{a|pb|}}''Careful not to confuse with “[[margin excess]]”''. | ||
In the storied world of [[exchange traded derivatives]], excess margin is margin your [[clearing broker]] requires over and above the margin required by the exchange on which the [[futures]] and [[options]] are traded. | In the storied world of [[exchange traded derivatives]], [[excess margin]] is margin your [[clearing broker]] requires over and above the official margin required by the exchange on which the [[futures]] and [[options]] are traded. This is an extra layer your broker may take to reflect your own concentration risk, credit fragility etc. Since, if you go ''[[tette in alto]]'', your broker still has to honour your obligations to the exchange, you can see why some brokers might be a little twitchy about this, and ask you to pony up a little bit more. | ||
Therefore, excess margin still counts as “[[required margin]]”, and is thus different from ''[[margin excess]]'' (I didn’t make up these names, don’t @ me) which, in theory, doesn’t. | |||
{{Sa}} | {{Sa}} | ||
*[[Margin excess]] | *[[Margin excess]] | ||
Latest revision as of 15:39, 7 September 2021
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Prime Brokerage Anatomy™
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Careful not to confuse with “margin excess”.
In the storied world of exchange traded derivatives, excess margin is margin your clearing broker requires over and above the official margin required by the exchange on which the futures and options are traded. This is an extra layer your broker may take to reflect your own concentration risk, credit fragility etc. Since, if you go tette in alto, your broker still has to honour your obligations to the exchange, you can see why some brokers might be a little twitchy about this, and ask you to pony up a little bit more.
Therefore, excess margin still counts as “required margin”, and is thus different from margin excess (I didn’t make up these names, don’t @ me) which, in theory, doesn’t.