Margin and Margin Risk

This training deals with all aspects related to what the margin is on modern financial markets, margining of the trades conducted on organized exchanges, margin and margin risk management in investment banking. OTC clearing and prime brokerage services are also covered.

To give the audience all the necessary information on what the margin is, how margin based trading is done on modern derivatives exchanges, how margin management and margin risk management is done in investment banking.

• Margin definition and purpose
• Margin based trading on derivatives exchanges
• Factors influencing the variation margin level
• Margin call and when it happens.
• Margin reductions when trading correlated contracts like calendar spreads
• Leverage effect from using margin
• Posted margin level management in investment bank when offering OTC clearing and prime brokerage services.
• How clearing houses calculate initial and variation margin (LCH example)
• Margin risk management with the help of market risk estimation techniques like VaR