# Initial margin

- Canonical URL: https://www.gerhardmerk.de/initial-margin
- Post ID: 589386
- Modified: 2023-07-25T21:02:12+00:00
- Language: en

## Definition

When buying as well as selling (short) an underlying forward, a certain amount of money must be available at the time the contract is concluded. This usually corresponds to a percentage of the total value of the contract concluded, which the bank requires. - In addition, a variation margin is calculated periodically during the term of the contract. This is calculated from the book profit or book loss resulting from the change in value of the contract or the underlying asset at market prices. In the case of a book loss (variation margin), the variation margin can be a multiple of the initial margin. - See European Master Agreement, futures markets, counterparty, central, margin call, Margin call, margin call, margin agreement, option, commodity futures contract, variation margin. - Cf. Deutsche Bundesbank Monthly Report of July 2006, pp. 63 ff. (effects of margins on the financial market as a whole). Attention: The financial encyclopedia is protected by copyright and may only be used for private purposes without express consent! University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec. Professor Dr. Eckehard Krah, Dipl.rer.pol. E-mail address: info@ekrah.com https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk https://www.jung-stilling-gesellschaft.de/merk/ https://www.gerhardmerk.de/

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