Margin - GMSLA Provision: Difference between revisions
Jump to navigation
Jump to search
Amwelladmin (talk | contribs) |
Amwelladmin (talk | contribs) No edit summary Tags: Mobile edit Mobile web edit |
||
Line 1: | Line 1: | ||
{{ | {{gmslaanat|Margin}} | ||
This is what other punters like to call the [[haircut]], and even through it is phrased in a similar way as an "extra", you should differentiate it from an {{csaprov|Independent Amount}} under an {{isdama}} or [[initial margin]] under an ETD agreement: This is more like a {{csaprov|Valuation Percentage}}. | This is what other punters like to call the [[haircut]], and even through it is phrased in a similar way as an "extra", you should differentiate it from an {{csaprov|Independent Amount}} under an {{isdama}} or [[initial margin]] under an ETD agreement: This is more like a {{csaprov|Valuation Percentage}}. | ||
The difference is that this {{gmslaprov|Margin}} percentage is a function of the type of {{gmslaprov|Collateral}} posted, and it is a deduction from the value of that Collateral, whereas a conventional initial margin is a function of the transaction exposure, and is an addition to the liability that the party is collateralizing. | The difference is that this {{gmslaprov|Margin}} percentage is a function of the type of {{gmslaprov|Collateral}} posted, and it is a deduction from the value of that Collateral, whereas a conventional initial margin is a function of the transaction exposure, and is an addition to the liability that the party is collateralizing. | ||
Line 7: | Line 5: | ||
That's not an entirely clear distinction, of course, in that the value of the {{gmslaprov|Collateral}} on any given day itself affects the {{gmslaprov|Market Value}} of the {{gmslaprov|Transaction}} itself, but it does so in an incidental way. | That's not an entirely clear distinction, of course, in that the value of the {{gmslaprov|Collateral}} on any given day itself affects the {{gmslaprov|Market Value}} of the {{gmslaprov|Transaction}} itself, but it does so in an incidental way. | ||
===See Also=== | |||
*[[Haircut]] | |||