NAV trigger: Difference between revisions
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===So, put the NAV trigger in a margin lockup=== | ===So, put the NAV trigger in a margin lockup=== | ||
Presuming you have reserved the right, as any sensible [[prime broker]] will, to increase [[initial margin]] at any time, there is a way out of this. It ought to work perfectly well, though [[credit]] won’t like it: ''put [[NAV trigger]]s in the [[margin lockup]] and not the master agreement. | Presuming you have reserved the right, as any sensible [[prime broker]] will, to increase [[initial margin]] at any time, there is a way out of this. It ought to work perfectly well, though [[credit]] won’t like it: ''put [[NAV trigger]]s in the [[margin lockup]] and not the master agreement. | ||
(Why won’t [[credit ]] like it? ''Because it means they won’t have anything to do''.) | |||
This means the [[NAV trigger]] is no longer, of itself, a {{isdaprov|Termination Event}} under the {{isdama}}. All it entitles you to do is raise [[initial margin]]. Calling for more IM will achieve one of two things: | This means the [[NAV trigger]] is no longer, of itself, a {{isdaprov|Termination Event}} under the {{isdama}}. All it entitles you to do is raise [[initial margin]]. Calling for more IM will achieve one of two things: | ||