InvestorQ : How are Extreme Loss Margins (ELM) computed?
Tisha Malhotra made post

How are Extreme Loss Margins (ELM) computed?

Answer
user profile image
Moii Chavate answered.
2 years ago


For client positions - are netted at the level of individual client and grossed across all clients, at the trading/ clearing member level, without any set-offs between clients.

For proprietary positions - are netted at trading/ clearing member level without any set-offs between client and proprietary positions.

The margins so computed are aggregated first at the trading member level and then aggregated at the clearing member level.

Imposition of additional margins

As a risk containment measure, the Clearing Corporation may require clearing members to make payment of additional margins as may be decided from time to time. This is in addition to the initial margin and extreme loss margin, which are or may have been imposed from time to time.