How Does a Margin Requirement Differ between OTC and Listed Futures Contracts?

Listed futures contracts have standardized margin requirements set by the exchange and the clearinghouse, which are uniform for all participants and subject to daily mark-to-market adjustments. OTC contracts have negotiated margin requirements set bilaterally between the two counterparties, often based on their credit ratings and the specific terms of the swap or forward.

The listed margin process is transparent and centrally managed, while the OTC process is private and variable.