Auditaudit Staff asked 2 years ago
3 Answers
RaviRavi Staff answered 2 years ago

Gross Exposure Margin is paid on daily basis it depends on outstanding shares position for each member, suppose member A has these positions
1,000 Share of Reliance Payable
2,000 share of Tata Shares Receivable
then stock market computes average daily movement in these shares and then computes maximum possible loss on these sahreholdings in 2 days and collects it as margin money this is called gross exposure margin
Volatility Margin is imposed rarely, whenever market movements increase, to curb it margin requirements is increased , this reduces buying selling capacity and decreases corresponding market demand supply decreases and volatility reduces

Harshit AgarwalHarshit Agarwal answered 2 years ago

and what is mark to market margin ?

RaviRavi Staff answered 2 years ago

in derivative segment
daily profit loss is computed as per closing price
losses are deposited with stock exchange as margin money
and profit is received as margin money
it is called marked to market (with the help of daily closing price)

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