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{{anat|pb}}In the context of PB margin could be: | {{anat|pb|}}Confusingly, “[[margin]]” can mean different things: | ||
*[[Spread]]: The [[spread]] or [[haircut]] a firm applies to a rate it offers its customer (such as an [[interest rate]] on a loan) — in the sense of a profit margin, ''or'' | |||
*The [[collateral]] a firm requires from time to time to cover its existing [[mark-to-market]] [[exposure]] to its customer on a given product (this is called “'''[[variation margin]]'''”), or the additional amount, over and above [[variation margin]], it requires upfront to cover ''potential'' deterioration in its [[mark-to-market]] [[exposure]] to its customer between the points (which could be daily, weekly or monthly, but these days tend to be daily) on which it can ask for more [[variation margin]] (this is called “'''[[initial margin]]'''”). | |||
===Prime brokerage=== | |||
In the context of PB, margin could be: | |||
*The total value of assets the prime broker requires its client to hold in excess of its total liabilities | *The total value of assets the prime broker requires its client to hold in excess of its total liabilities | ||
*The prime broker’s general right to set and adjust that limit and call for additional assets at any time. | *The prime broker’s general right to set and adjust that limit and call for additional assets at any time. | ||
===Return of excess margin=== |