Dictionary
Thesaurus
Encyclopedia
Translator
Web

variation margin

 - 1 dictionary result
Financial Dictionary

Variation Margin

A variable margin payment that is made by clearing members to their respective clearing houses based upon adverse price movements of the futures contracts that these members hold.

Investopedia Commentary

Variation margin is paid by clearing members on a daily or intraday basis in order to reduce the exposure created by carrying highly risky positions. By demanding variation margin from its members, clearing organizations are able to maintain a suitable level of risk and cushions against significant devaluations.

See also: Clearing, Clearing House, Intraday, Leverage, Maintenance Margin, Margin, Margin Call

Investopedia.com. Copyright © 1999-2005 - All rights reserved. Owned and Operated by Investopedia Inc.
Cite This Source
Search another word or see variation margin on Thesaurus | Reference
FacebookTwitterFollow us: