Our margining process is a multifaceted and time critical process that takes into account a variety of factors in order to calculate margins that adequately protect you, the Clearing Member, your customers, the Clearing House and therefore the marketplace as a whole. We do this while simultaneously setting appropriate levels that do not tie up excess capital.
What is a margin?
Margin is defined as the funds or securities which must be deposited by Clearing Members as collateral for a given position. Margining encompasses the entire process of measuring, calculating and administering the collateral that must be put up for coverage of open positions. The provision of collateral is intended to ensure that all financial commitments related to the open positions of a Clearing Member can be offset within a very short period of time.
Members can satisfy margin requirements by depositing securities or cash. Variation margin (i.e. daily settlement of profits and losses) as well as premiums on traditional options and futures on options must be paid in cash.
Modern risk management methods need to cope with the advances in trading speeds and changing market characteristics. For that reason, Eurex Clearing calculates real-time the margin requirements for derivatives products by any position or price change. Margin information for equity and fixed income cash products are provided every ten minutes.
