Margin Offsets

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Margin offsets for futures and options on futures are credits to initial margin requirements positions together in a portfolio or single account with the same account(s) owner. Margin offsets reduce the total amount of assets that must be pledged by the broker to the clearinghouse on behalf of the client.[1]

Margin offsets may occur due to cross-margining agreements between exchanges, clearinghouses or other organizations holding physical asset positions.[2]

Security Futures

In the U.S., the basic margin requirement for security futures is 20% of the underlying value of the contract (initial and maintenance margin). This 20% minimum may be reduced for certain types of futures market positions, such as calendar and basket spreads, and for certain offsetting positions in stock options and cash securities, provided the security futures are held in securities accounts. Margin requirements can be satisfied with cash, margin securities and open trade equity in other futures account.[3]

Resources

References

  1. Futures Margin Offsets. Australian Securities Exchange.
  2. CROSS-MARGINING AGREEMENT. DTCC.
  3. Margin Requirements. One Chicago.