variation margin
- Daily or intraday payment by a clearing member to a clearing organization due to unfavorable changes in the value of held positions, determined separately for a customer and the member's own positions
- Due to the drop in stock prices, the firm had to pay a hefty variation margin.
- Variation margin payments can protect clearing organizations against potential losses.
- Underestimated variation margins can cause significant financial distress to clearing members.
Provide Feedback
