Risk glossary

 

Initial margin

The amount of collateral that must be posted to the opposite party in a trade (the counterparty, exchange, or clearer/central clearing counterparty (CCP)) that reflects the risk of the trade moving in the future. Will be posted when the trade is struck and afterwards. There are several algorithms used for the calculation margin, such as SPAN.

* see also central clearing counterparty (CCP); collateral; variation margin

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