Initial margin


Also found in: Acronyms.

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.

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%.
References in periodicals archive ?
The key assumptions in this example are the haircut charged on financing the corporate bond purchase in the repo market, the initial margin required on the single-name CDS position, and whether the CDS is centrally cleared, which determines the potential future exposure (PFE) cost.
Mumbai (Maharashtra) [India], June 6 ( ANI ): In line with international standards, the Reserve Bank of India (RBI) announced that starting August 1, a new initial margin on collateral will be required on the basis of residual maturity.
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.
Banks would be able to adjust ISDA's system, known as the standard initial margin model, to fit their specific situation.
(11) LSOC is significant as it precludes the option of a CCP to utilize the initial margin assets of nondefaulting cleared swaps customers of a failed FCM to offset the financial loss of one or more defaulting cleared swaps customers of that FCM.
In a press release, the Prudential Regulators say, "The proposed rule does not require a covered swap entity to collect specific or minimum amounts of initial margin or variation margin from nonfinancial end users, but rather leaves that decision to the covered swap entity, consistent with its overall credit risk management." Again, that is how things stand today, Dodd-Frank notwithstanding.
Statewide recounts have changed a result only three times in the past decade - in Washington, Vermont and Minnesota - and the largest initial margin in those was only 312 votes.
However, "all derivatives as of June 30 of this year are grandfathered, so you don't need to post the initial margin as you have to buy new derivatives and we have longtail derivatives, so it will affect us over many years," Kandarian explained in May.
"Our position is there should be an initial margin for everyone," Vieillefond said.
At Rs 1,253 per kg on 25 April 2012, an investor would have had to pay an initial margin of Rs 63 (5 per cent) to buy one unit (one kg) of the metal that day.
Treasuries, and--for initial margin only--some agency bonds.
23 that initial margin for COMEX gold futures would rise by 21 percent.

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