Variation margin

From MarketsWiki
Jump to navigation Jump to search

Variation margin is a variable margin payment made by clearing members on a daily or intraday basis to their respective clearing houses, in order to reduce the exposure created by carrying highly risky positions. It is based upon adverse price movements of the futures contracts that these members hold.

By demanding variation margin from its members, clearing organizations are able to maintain a cushion against significant devaluations.[1]


  1. Variation Margin. Investopedia.