{"id":25677,"date":"2013-05-17T11:23:53","date_gmt":"2013-05-17T05:53:53","guid":{"rendered":"http:\/\/vskills.in\/certification\/tutorial\/?p=25677"},"modified":"2024-04-12T14:18:22","modified_gmt":"2024-04-12T08:48:22","slug":"calculating-initial-margin","status":"publish","type":"page","link":"https:\/\/www.vskills.in\/certification\/tutorial\/calculating-initial-margin\/","title":{"rendered":"Calculating Initial Margin"},"content":{"rendered":"\n<div class=\"wp-block-image\"><figure class=\"aligncenter size-large\"><a ref=\"magnificPopup\" href=\"https:\/\/www.vskills.in\/certification\/tutorial\/wp-content\/uploads\/2020\/12\/Language-2020-12-29T004658.486.png\"><img loading=\"lazy\" decoding=\"async\" width=\"750\" height=\"400\" src=\"https:\/\/www.vskills.in\/certification\/tutorial\/wp-content\/uploads\/2020\/12\/Language-2020-12-29T004658.486.png\" alt=\"Calculating Initial Margin\" class=\"wp-image-97325\" srcset=\"https:\/\/www.vskills.in\/certification\/tutorial\/wp-content\/uploads\/2020\/12\/Language-2020-12-29T004658.486.png 750w, https:\/\/www.vskills.in\/certification\/tutorial\/wp-content\/uploads\/2020\/12\/Language-2020-12-29T004658.486-300x160.png 300w\" sizes=\"auto, (max-width: 750px) 100vw, 750px\" \/><\/a><\/figure><\/div>\n\n\n<h3><strong>Calculating Initial Margin<\/strong><\/h3>\n<p>Let&#8217;s learn more about calculating initial margin. Exchange uses the SPAN system for real-time initial margin computation. Initial margin requirements are based on 99.95% VaR over a one-day session.<\/p>\n<p><span style=\"line-height: 1.714285714; font-size: 1rem;\">For members, the initial margin requirements are:<\/span><\/p>\n<ul>\n<li><span style=\"line-height: 1.714285714; font-size: 1rem;\">\u00a0For client positions: Client positions are netted for each individual client and grossed for all clients combined at the member level with no set-offs between clients themselves.<\/span><\/li>\n<li><span style=\"line-height: 1.714285714; font-size: 1rem;\">\u00a0For proprietary positions: These positions are netted at member level with no set-offs between client and proprietary positions.<\/span><\/li>\n<\/ul>\n<p><span style=\"line-height: 1.714285714; font-size: 1rem;\">This is explained through an example:\u00a0 A trading member has proprietary and client-level positions in a `July 2012 gold futures contract. On the proprietary account, 4000 trading units are bought and 2000 trading units are sold in one trading session. On the account of client X, 3000 trading units are bought at the beginning of the day and 2500 units are sold an hour later. And on account of client Y, 1000 trading units are sold. Hence, by looking at the table below, it is understood how the initial margin will be calculated. Fed regulations currently require that\u00a0initial margin\u00a0is set at a minimum of 50% of a security&#8217;s purchase price. But exchanges can set\u00a0initial margin\u00a0requirements higher than the Fed minimum.<\/span><\/p>\n<p><a ref=\"magnificPopup\" href=\"http:\/\/vskills.in\/certification\/tutorial\/wp-content\/uploads\/2013\/05\/margin.png\"><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-43277 aligncenter\" src=\"http:\/\/vskills.in\/certification\/tutorial\/wp-content\/uploads\/2013\/05\/margin.png\" alt=\"margin\" width=\"570\" height=\"166\" srcset=\"https:\/\/www.vskills.in\/certification\/tutorial\/wp-content\/uploads\/2013\/05\/margin.png 570w, https:\/\/www.vskills.in\/certification\/tutorial\/wp-content\/uploads\/2013\/05\/margin-300x87.png 300w\" sizes=\"auto, (max-width: 570px) 100vw, 570px\" \/><\/a><\/p>\n\n\n<p><a href=\"https:\/\/www.vskills.in\/certification\/tutorial\/certified-commodity-trader\/\" target=\"_blank\" rel=\"noreferrer noopener\">Back to Tutorial<\/a><\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter size-large\"><a ref=\"magnificPopup\" href=\"https:\/\/www.vskills.in\/certification\/tutorial\/wp-content\/uploads\/2020\/12\/Certified-Core-Java-Developer-3-2.png\" target=\"_blank\" rel=\"noopener\"><img loading=\"lazy\" decoding=\"async\" width=\"960\" height=\"150\" src=\"https:\/\/www.vskills.in\/certification\/tutorial\/wp-content\/uploads\/2020\/12\/Certified-Core-Java-Developer-3-2.png\" alt=\"certified commodity trader free practice test\" class=\"wp-image-97068\" srcset=\"https:\/\/www.vskills.in\/certification\/tutorial\/wp-content\/uploads\/2020\/12\/Certified-Core-Java-Developer-3-2.png 960w, https:\/\/www.vskills.in\/certification\/tutorial\/wp-content\/uploads\/2020\/12\/Certified-Core-Java-Developer-3-2-300x47.png 300w\" sizes=\"auto, (max-width: 960px) 100vw, 960px\" \/><\/a><\/figure><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Calculating Initial Margin Let&#8217;s learn more about calculating initial margin. Exchange uses the SPAN system for real-time initial margin computation. Initial margin requirements are based on 99.95% VaR over a one-day session. For members, the initial margin requirements are: \u00a0For client positions: Client positions are netted for each individual client and grossed for all clients&#8230;<\/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":[5520],"class_list":["post-25677","page","type-page","status-publish","hentry","category-commodity-dealer","tag-calculating-initial-margin"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v24.5 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Calculating Initial Margin - Tutorial<\/title>\n<meta name=\"description\" content=\"Learn more about Calculating Initial Margin. 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