Initial margin

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Initial margin

(1) Amount of money deposited by both buyers and sellers of futures contracts to ensure performance of the terms of the contract; (2) amount of cash or eligible securities required to be deposited with a broker before engaging in margin transactions.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Initial Margin

The money or securities an investor keeps in a margin account in order to be able to borrow from a brokerage for short sales or other purposes. The initial margin requirement is kept as collateral until the brokerage calls the margin and the client pays back what is owed. FINRA requires that the initial margin requirement kept must be at least 25% of the amount borrowed, while some brokerages have initial margin requirements of up to 50%.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
References in periodicals archive ?
Combining the amount received by the dealer (the basis) with the total cost of the position (cost of funding of initial margins and cost of repo financing of the bond position) gives the net carry (profit or income) on the trade, which equals $19,400 in this example.
These gains were partially offset by lower initial margins due in part to lower mix of private label merchandise and deleverage in delivery expense due in part to the increased penetration of the digital channel.As of April 30, total inventory increased by $45.1M, or 12.6%, on a year-over-year basis.
They can only be traded when the exchanges are open, they require initial margins of 35 to 45 percent, and deposits must be made in dollars rather than bitcoins.
Three cases were excluded from the study, 2 of which had positive initial margins upon reevaluation, and 1 in which the exhausted tissue levels were lost.
We assume that all fixed-for-floating swaps are plain vanilla and that they are therefore subject to central clearing and initial margins reflecting a 99.7 percent confidence threshold for five-day losses.
Leverage is risk magnifier where Brokers offer bigger holdings in comparisons to small initial margins deposits.
Initial margins on all contracts will rise to five per cent of the value from September 2, from four per cent, the Forward Markets Commission said on website.
He discussed the new margins coming into place, new requirements for initial margins for derivatives, which began this month, that will be phased in over these coming years, under Dodd-Frank as well as the international bodies' suggestions that will be phased in over a longer period of time.
Management attributes the fourth-period margin improvement to better initial margins on pharmacy sales and lower shrinkage levels, which offset the aforementioned shift in product mix toward lower-margin basic and consumable items.
Equation 3 allows us to compute the break-even critical loss for various combinations of price increases ([Delta]P/P) and initial margins (P - MC)/P.
(9.) One should not necessarily conclude that the correlations between returns from buying the straddles and buying the S&P 500 are positive because initial margins and maintenance margins are taken into account in computing the returns from selling straddles.

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