March 2002
Intermediate to advanced
176 pages
3h 48m
English
book
Asset and Liability Management: The Banker’s Guide to Value Creation and Risk Control, Second Edition
by Jean Dermine, Youssef F. Bissada
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Marking-to-market and margin calls
In order to enter a financial future, you have to deposit a margin (a guarantee) with the exchange. At the end of every day, the terms of the contract are adjusted (marked-to-market) to the price prevailing on the future exchange.
For instance, if the price goes up to 91, e-Bank will now have to pay 91 (instead of 90). In compensation, e-Bank will receive a cash payment of 1. In reverse, Alpha Bank will have to use its margin to pay the loss of 1.
Profits and losses are settled on a daily basis (daily margin calls) and the losing party is forced to use its margins to finance the loss, which helps to significantly reduce the risk of default for the exchange and for the market participants. To remain in the market, ...
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I wanted to learn C and C++, but it didn't click for me until I picked up an O'Reilly book. When I went on the O’Reilly platform, I was astonished to find all the books there, plus live events and sandboxes so you could play around with the technology.Addison B.
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