Okuzeka
Finance & Banking vocabulary · Treasury & Markets

Initial margin

Meaning in finance & banking, with examples

nounAdvanced term

In finance & banking, initial margin means: Collateral collected to cover potential exposure from future market movements over a defined close-out period.

In Turkish: başlangıç teminatı

How it is used

Use in derivatives and clearing; it differs from collateral covering already-realized valuation changes.

Example sentences

  1. The clearing house increased initial margin after market volatility rose.

    Larger possible price moves can require more protection.

  2. The trader posted initial margin before opening the futures position.

    The collateral supports potential future exposure on the position.

Common collocations

  • post initial margin
  • initial margin requirement
  • collateralAn asset, such as property, cash or securities, that a borrower pledges to a lender and that the lender can sell if the loan is not repaid.
  • derivativeA financial contract whose value depends on the price of something else, such as a currency, interest rate, share or commodity.

More terms: Treasury & Markets

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This page explains English vocabulary for learners. It is not financial advice.