Variation margin: Difference between revisions
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imported>Doug Williamson (Add link.) |
imported>Doug Williamson (Add other derivative instruments to definition.) |
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In futures markets, a potentially refundable amount payable by a 'losing' market participant, to protect other participants in the market against the risk of a default. | In futures markets, a potentially refundable amount payable by a 'losing' market participant, to protect other participants in the market against the risk of a default. | ||
If the market price were subsequently to change in favour of the participant, the variation margin would be refunded. | If the market price were subsequently to change in favour of the participant, the variation margin would be refunded. | ||
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Similar amounts payable in relation to other derivative instruments. | |||
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== See also == | == See also == | ||
* [[Derivative instrument]] | |||
* [[Futures]] | * [[Futures]] | ||
* [[Initial margin]] | * [[Initial margin]] | ||
* [[Margin]] | * [[Margin]] | ||
* [[Margin call]] | * [[Margin call]] | ||
Revision as of 18:32, 1 July 2017
(VM).
1.
In futures markets, a potentially refundable amount payable by a 'losing' market participant, to protect other participants in the market against the risk of a default.
If the market price were subsequently to change in favour of the participant, the variation margin would be refunded.
2.
Similar amounts payable in relation to other derivative instruments.
Variation margin is also sometimes known as 'maintenance margin'.
