Risk glossary

 

Margin

Cash deposits required for a contract, which serve as a good-faith deposit guaranteeing both parties to the agreement will perform the transaction at some point in the future. Collateral that is posted and subject to forfeit in case of default of the underlying obligation. Margin can be satisfied with eligible collateral, usually in the form of cash, government bonds, or letters of credit.

* see also central counterparty (CCP); initial margin; variation margin

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