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===The basic problem part II=== | ===The basic problem part II=== | ||
Now remember: unlike [[variation margin]], where only the [[in-the-money]] counterparty holds it, there are necessarily ''two'' bucket of [[Regulatory IM]] at all times: the stuff ''you'' have posted as security for [[mark-to-market]] moves against ''you'', and the stuff ''the other guy'' has posted as mark-to-market movements against ''her''. | |||
Now: if a catastrophic event affects one party that preceipittates a close-out, there will be a winner and a loser — only one of each — but ''it does not follow that the {{isdaprov|Unaffected Party}} will be the winner''. Its portfolio may be [[out-of-the-money]]. Until the final {{isdaprov|Early Termination Amount}} is known — and this can take a while — it ''should not'' get its {{imcsdprov|Initial Margin}} back, and nor should it get to take the Affected Party’s {{imcsdprov|Initial Margin}}. | |||
===What were they ''trying'' to achieve? go figure.=== | ===What were they ''trying'' to achieve? go figure.=== |