strategy-based margining
- A way of determining margin requirements by considering the potential of one portfolio position to balance out losses on another, provided the portfolio utilizes certain recognized trading strategies as specified by an exchange or clearing organization's rules
- The broker explained that their firm uses strategy-based margining to calculate requirements.
- In strategy-based margining, the effectiveness of trading strategies is considered for portfolio balancing.
- Strategy-based margining may not be comprehensively reflective of portfolio risk, brokers say.
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