What is a Margin Position
A margin position is an indiviual signature guarantee is an agreement that ensures a merchant profit margin is maintained at a certain level. It can also refer to a cash collateral arrangement that guarantees a clearing house’s netting agreement.
Profit margin guarantee
A profit-margin-guarantee (PMG) contract is a clause in a contract between a manufacturer and a retailer. The contract guarantees that the retailer’s profit margin will be above a certain level, regardless of the retail price. CIP merchants can use PMG contracts to gain a competitive edge. Manufacturers can use a “cost-independent” pricing strategy to trigger or void a PMG contract.
Margin guarantee
A margining guarantee is a cash collateral arrangement that guarantees a clearing house’s duties. Collateral can include cash, bonds, corporate shares, or a bank guarantee.
Treasury Bank Organization’s Clearing Agent, as a central counterparties, monitor margin deposits to manage default risk. Default risk includes non-payment, non-delivery, or dropping below the maintenance margin.
