83,229
edits
Margin excess: Difference between revisions
Jump to navigation
Jump to search
no edit summary
Amwelladmin (talk | contribs) No edit summary |
Amwelladmin (talk | contribs) No edit summary |
||
| Line 3: | Line 3: | ||
[[Excess margin]], while the PB holds it, is subject to all the usual [[Security collateral arrangement|security arrangements]]; the only difference is that the customer does not ''have'' to let the PB hold it; but customers habitually do because it is convenient — they have to hold it somewhere, so why not with the good old [[prime broker]]? — and because it tends to make their [[prime broker]]s feel better about things, even if perhaps they shouldn’t.<ref>See {{CS report}}</ref> | [[Excess margin]], while the PB holds it, is subject to all the usual [[Security collateral arrangement|security arrangements]]; the only difference is that the customer does not ''have'' to let the PB hold it; but customers habitually do because it is convenient — they have to hold it somewhere, so why not with the good old [[prime broker]]? — and because it tends to make their [[prime broker]]s feel better about things, even if perhaps they shouldn’t.<ref>See {{CS report}}</ref> | ||
The reality about just when a customer may ask for its excess margin back — whenever it likes, in the normal run of things — can startle a complacent risk officer, but what a startled risk officer can then do if it doesn’t terribly like the idea of giving the | The reality about just when a customer may ask for its excess margin back — whenever it likes, in the normal run of things — can startle a complacent risk officer, but what a startled risk officer can then do if it doesn’t terribly like the idea of giving the margin excess back — reclassifying it as ''required'' [[margin]] by means of a [[margin adjustment]] — tends to make the risk officer feel a bit better, even though she might not quite believe it. | ||
As long as you have a margin excess, you shouldn’t need to make a [[margin call]] — a [[margin adjustment]] will do. | |||
{{sa}} | {{sa}} | ||