Variation margin

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Variation margin

An additional required deposit to bring an investor's equity account up to the margin level when the balance falls below the maintenance margin requirement.

Variation Margin

Extra money that a member of a clearing house must pay to the clearing house to meet its minimum maintenance requirements. Members pay the variation margin each day or more often to protect the clearing house from the risks inherent to its members buying on margin.
References in periodicals archive ?
Firms dealing in non-standardised OTC derivatives will be in a same position to cleared derivatives and will be grateful to post both initial margin and variation margins when trading.
Several deal with derivatives, where the exposure can now be lowered by deducting cash variation margins, excluding exposures that would be double-counted in some central clearing processes and capping written credit derivatives exposures at the level of the maximum potential loss.
The DCCC guarantees settlement for all trades executed on the Dubai Gold & Commodities Exchange (DGCX), which is supported by a system of initial and variation margins.
Using daily data on margins and variation margins for all clearing members of the Chicago Mercantile Exchange, we analyze the clearing house exposure to the risk of default by clearing members.
Daily aggregate gains or losses are termed variation margins.
Our data set includes performance bonds and variation margins for all CMs of the Chicago Mercantile Exchange's CCP over the period January 4, 1999-December 31, 2001.
Further, we find negative correlation between house and customer variation margins ([V.
We present our data and analyze the risk properties of the performance bonds and variation margins for house and customer accounts in the "Risk Analysis" section.
Our empirical analysis is based on daily performance bond requirements (B) and daily variation margins (V) for all the CMs of the Chicago Mercantile Exchange's CCP (see list in Table 1).
A heavy emphasis on the credit sustainability of financial players has pushed investment banks to strengthen their collateral management processing with precise initial margin calculation and frequent variation margins capacities.
Possible technical solutions for the transfer of non-cash collateral as variation margins by pension scheme arrangements (PSAs) in respect of centrally cleared over-the-counter (OTC) derivative transactions.
Scheduled for full operation in early 2014, this exclusive agreement with Euroclear will enable clients of DCCC and DGCX to use CCP-eligible securities held in Euroclear Bank - and in all other entities connected to the Collateral Highway - as collateral to fulfil initial and variation margin requirements at DCCC.