Net Margin is the sum of Initial Margin and Contingent Variation Margin (this will be Option Value) for Options or the Contingent Variation calculated for Forward contracts. This is the amount that needs to be covered by collateral (as opposed to Realised Variation Margin which is a cash flow). The Net Margin will never be greater than Zero. Any excess Contingent Variation Margin will be wasted as the profits cannot be realised.
We invite you to learn more and read more of our content. Explore our collection of Ebooks, such as our Margin Management Ebook . Explore a wide selection of blogs on our insights page, such as our blog on How To Use Option Value To Optimise Your Margin In Current Market Conditions. Additionally, learn more about OpenGamma by watching our demo and taking a look at our product and solutions pages.
