Hedging exemption: Difference between revisions

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	{{a\|repack\|{{image\|delta-hedge\|jpeg\|A [[delta-hedge]] yesterday.}}}}[[EMIR]] regulates the infrastructure of European financial markets, and one of its main jobs is to mandate the exchange of [[Variation margin\|variation]] and [[initial margin]] for [[Uncleared derivatives margin - EMIR Provision\|uncleared derivatives]] — a sort of cack-handed [[behavioural psychology]] play to nudge OTC derivatives trading onto exchange. Hasn’t worked. Anyway, we digress.		{{a\|repack\|{{image\|delta-hedge\|jpeg\|A [[delta hedge]] yesterday.}}}}[[EMIR]] regulates the infrastructure of European financial markets, and one of its main jobs is to mandate the exchange of [[Variation margin\|variation]] and [[initial margin]] for [[Uncleared derivatives margin - EMIR Provision\|uncleared derivatives]] — a sort of cack-handed [[behavioural psychology]] play to nudge OTC derivatives trading onto exchange. Hasn’t worked. Anyway, we digress.

	Posting cash to a counterparty for mark-to-market moves is a painful, and [[When variation margin attacks\|in some respects, stupid]] thing to do, and some market participants are not well set up to do it, others for which the scale of their trading means it is not worth the bother — and many for which both is true. These are the so-called “[[Non-financial counterparties - EMIR Provision\|non-financial counterparties]]” — businesses not designed primarily for the financial services industry, and whose incidental activity in OTC derivatives markets does falls below [[EMIR clearing thresholds\|specified thresholds]].		Posting cash to a counterparty for mark-to-market moves is a painful, and [[When variation margin attacks\|in some respects, stupid]] thing to do, and some market participants are not well set up to do it, others for which the scale of their trading means it is not worth the bother — and many for which both is true. These are the so-called “[[Non-financial counterparties - EMIR Provision\|non-financial counterparties]]” — businesses not designed primarily for the financial services industry, and whose incidental activity in OTC derivatives markets does falls below [[EMIR clearing thresholds\|specified thresholds]].