{"id":25676,"date":"2013-05-17T11:23:51","date_gmt":"2013-05-17T05:53:51","guid":{"rendered":"http:\/\/vskills.in\/certification\/tutorial\/?p=25676"},"modified":"2024-04-12T14:18:22","modified_gmt":"2024-04-12T08:48:22","slug":"risk-management-margining","status":"publish","type":"page","link":"https:\/\/www.vskills.in\/certification\/tutorial\/risk-management-margining\/","title":{"rendered":"Risk Management & Margining"},"content":{"rendered":"\n
\"Risk<\/a><\/figure><\/div>\n\n\n
\n

Let’s learn about risk management and margining. Margining risk\u00a0is a\u00a0financial risk\u00a0that future\u00a0cash flows\u00a0are smaller than expected due to the payment of\u00a0margins, i.e. collateral as a deposit from a\u00a0counterparty\u00a0to cover some (or all) of its\u00a0credit risk. It can be seen as short-term\u00a0liquidity risk, a quantity called\u00a0MaR can be used to measure it.\u00a0<\/p>\n

Margin, in simple terms, is an exchange introduced risk management procedure. Let us understand the concept in detail through a simple example.<\/p>\n

An investor has a bullish view on the market and purchases 2,000 shares of \u2018ABC\u2019 company at Rs100 on March 05, 2018. To complete the transaction, he\/she has to make a payment of Rs2,00,000 (2,000×100) to his broker on or before March 06, 2018. The broker, in turn, has to provide this money to the respective stock exchange through which the transaction occurred by March 07, 2018. In this situation, there is always a risk that the investor may not be in a position to oblige the trade by the required date. Risk management and margining is an important aspect of commodity traders.<\/p>\n

In order to deal with this issue, the broker collects an upfront token amount from the client. The stock exchange then collects a similar amount from the broker upon execution of the order. This initial amount that was collected is known as ‘margin’.<\/p>\n

Margin amount is collected for both the buyer and the seller of the shares in order to make sure that both parties oblige to the contract. It is collected from the seller to ensure that he delivers the shares sold, while it is collected from the buyer so that he brings the money and is serious about the transaction.<\/p>\n

Back to Tutorial<\/a><\/p>\n<\/div>\n\n\n

\"certified<\/a><\/figure><\/div>\n","protected":false},"excerpt":{"rendered":"

Let’s learn about risk management and margining. Margining risk\u00a0is a\u00a0financial risk\u00a0that future\u00a0cash flows\u00a0are smaller than expected due to the payment of\u00a0margins, i.e. collateral as a deposit from a\u00a0counterparty\u00a0to cover some (or all) of its\u00a0credit risk. It can be seen as short-term\u00a0liquidity risk, a quantity called\u00a0MaR can be used to measure it.\u00a0 Margin, in simple terms,…<\/p>\n","protected":false},"author":1,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"footnotes":""},"categories":[3357],"tags":[],"class_list":["post-25676","page","type-page","status-publish","hentry","category-commodity-dealer"],"acf":[],"yoast_head":"\nRisk Management & Margining Tutorials<\/title>\n<meta name=\"description\" content=\"Learn more about Risk Management & Margining. practice and validate your skills to become Certified Commodity Trader !!\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.vskills.in\/certification\/tutorial\/risk-management-margining\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Risk Management & Margining Tutorials\" \/>\n<meta property=\"og:description\" content=\"Learn more about Risk Management & Margining. practice and validate your skills to become Certified Commodity Trader !!\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.vskills.in\/certification\/tutorial\/risk-management-margining\/\" \/>\n<meta property=\"og:site_name\" content=\"Tutorial\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/vskills.in\/\" \/>\n<meta property=\"article:modified_time\" content=\"2024-04-12T08:48:22+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.vskills.in\/certification\/tutorial\/wp-content\/uploads\/2020\/12\/Language-100.png\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data1\" content=\"1 minute\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.vskills.in\/certification\/tutorial\/risk-management-margining\/\",\"url\":\"https:\/\/www.vskills.in\/certification\/tutorial\/risk-management-margining\/\",\"name\":\"Risk Management & Margining Tutorials\",\"isPartOf\":{\"@id\":\"https:\/\/www.vskills.in\/certification\/tutorial\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.vskills.in\/certification\/tutorial\/risk-management-margining\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.vskills.in\/certification\/tutorial\/risk-management-margining\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.vskills.in\/certification\/tutorial\/wp-content\/uploads\/2020\/12\/Language-100.png\",\"datePublished\":\"2013-05-17T05:53:51+00:00\",\"dateModified\":\"2024-04-12T08:48:22+00:00\",\"description\":\"Learn more about Risk Management & Margining. practice and validate your skills to become Certified Commodity Trader !!\",\"breadcrumb\":{\"@id\":\"https:\/\/www.vskills.in\/certification\/tutorial\/risk-management-margining\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.vskills.in\/certification\/tutorial\/risk-management-margining\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.vskills.in\/certification\/tutorial\/risk-management-margining\/#primaryimage\",\"url\":\"https:\/\/www.vskills.in\/certification\/tutorial\/wp-content\/uploads\/2020\/12\/Language-100.png\",\"contentUrl\":\"https:\/\/www.vskills.in\/certification\/tutorial\/wp-content\/uploads\/2020\/12\/Language-100.png\",\"width\":750,\"height\":400,\"caption\":\"Risk Management & Margining\"},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.vskills.in\/certification\/tutorial\/risk-management-margining\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/www.vskills.in\/certification\/tutorial\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Risk Management & Margining\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.vskills.in\/certification\/tutorial\/#website\",\"url\":\"https:\/\/www.vskills.in\/certification\/tutorial\/\",\"name\":\"Tutorial\",\"description\":\"Vskills - 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