One of our contacts wanted to draw theweeklyFiX’s attention to a document he had seen from the CME that reads: ‘As per the normal review of market volatility to ensure adequate collateral coverage, the Chicago Mercantile Exchange Inc., Clearing House Risk Management staff approved the performance bond requirements for the following products listed below.’
The ‘performance bond’ bit is more commonly known as margin.
But there is nothing sinister about this.
‘Span’, the method by which the CME determines margins, is rigorous, transparent and regularly reviewed.
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