What is Variation Margin?
Definition of Variation Margin
Variation Margin reflects the daily change in market value of the contracts, i.e. the daily gain or loss of a contract due to market movements.
Explanation of Variation Margin
An extra amount of money that a member of a clearing house must pay to the clearing house to meet its minimum maintenance requirements. Members pay the variation margin each day or more often to protect the clearing house from the risks inherent to its members buying on margin.
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