The margin requirement is the minimum amount of assets a client must hold on the balance before buying on margin.
On the EXANTE desktop platform, you can check margin requirements for each instrument by right-clicking on an instrument in the list of ‘Instruments’ > choosing ‘Instrument Info’.
For many instruments, our clients can use both cash and securities to satisfy the margin requirement.
To calculate specific requirements, we use an in-house risk management system, a variation of SPAN. It examines an amount of scenarios with the worst possible loss your portfolio can suffer over a specified time span.
The model uses a set of parameters including:
- The quality of your portfolio
- The risks associated with a chosen asset in the current market conditions
The obtained margin requirement indicates how much value a portfolio may lose in a worst-case scenario. For setting margin discounts, EXANTE uses the intercommodity spread credit between correlating underlyings.
Important note: In case of a black swan event, margin concentration penalty applies.