Template:Initialmargindescription: Difference between revisions
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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 | 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 against your [[counterparty]] at the same time as it implodes, all before you have a chance to make a further [[variation margin]] call. <br> | ||
Latest revision as of 04:25, 31 December 2019
To be contrasted with variation margin, initial margin (in the ISDA troposphere known as an “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 against your counterparty at the same time as it implodes, all before you have a chance to make a further variation margin call.