Variation margin: Difference between revisions
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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 == | ||
* [[Futures]] | * [[Collateralized to market]] | ||
* [[Default]] | |||
* [[Derivative instrument]] | |||
* [[Forward contract]] | |||
* [[Futures contract]] | |||
* [[Initial margin]] | * [[Initial margin]] | ||
* [[Margin]] | * [[Margin]] | ||
* [[Margin call]] | |||
[[Category:The_business_context]] | |||
[[Category:Identify_and_assess_risks]] | |||
[[Category:Manage_risks]] | |||
[[Category:Risk_frameworks]] | |||
[[Category:Financial_products_and_markets]] | |||
Latest revision as of 15:37, 4 August 2022
(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'.
