// definition
Margin call
Demand for additional cash or collateral
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Short definition
A request for additional cash or collateral when the value or risk of a position changes. It may be variation margin settling the current loss or an increase in initial margin covering a potential loss after default.
risk atlas
Knowledge map
Intuition
A margin call does not mean a hedge is economically wrong. It means its current loss or potential risk must be funded now.
Formula
liquidity need = variation margin + increase in initial margin - available cash and collateralWhy it matters now
A producer short futures can gain on physical crude and still have to advance cash before the cargo settles.
Related analyses
- When the barrel becomes a margin callHedging, cash, clearing and transmission to bank balance sheets.
Related guides
- Reading the oil marketPrices, curve, inventories, OPEC and physical data.
- Reading interest-rate swapsValuation, clearing and counterparty risk in derivatives.
Related datasets
- risk.jsonPublic snapshot of the risk signals.
- signals/history.jsonPoint-in-time history of the signals.
- risk-diff.json1, 7 and 30-day diff of signals, sources and models.
- evidence-graph.jsonClaims, evidence and their sources as a graph.
Signals using it
- Energy MonitorMethodology of the energy stress signal.
- Risk DiffRecent change in risk and source freshness.
Primary sources
- Intercontinental ExchangeBrent future specifications, clearing and indicative margins.
- European Central BankEnergy derivatives, margin calls, bank credit and EMIR data.
- Bank of EnglandMeasures of the 2022 European energy-margin stress.
- Financial Stability BoardInternational recommendations on margin-call preparedness.