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The significance of hedging capital requirements

✍ Scribed by Steven C. Blank

Book ID
102218830
Publisher
John Wiley and Sons
Year
1992
Tongue
English
Weight
456 KB
Volume
12
Category
Article
ISSN
0270-7314

No coin nor oath required. For personal study only.

✦ Synopsis

This is Giannini Foundation Research Paper No. 983. '"Marking-to-market" or "daily resettlement" is the process used by futures exchanges to adjust account balances at the end of each trading day to insure market liquidity. All losses incurred must be met by a cash payment, even if the position remains open. Any profits accrued in futures positions may be used to cover losses, and surplus profits can be withdrawn in cash if desired.

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Determining futures β€œhedging reserve” capital requirements
✍ Steven C. Blank πŸ“‚ Article πŸ“… 1990 πŸ› John Wiley and Sons 🌐 English βš– 603 KB

debate is developing over the effects of margin calls on hedgers. Many analysts A have ignored marking-to-market ' requirements of hedgers either because they assumed hedgers would have an established line of credit with a lender to cover margin calls as needed, or because they assumed the interest