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How Does Margin Call Management Relate to a Prime Broker’s Risk Mitigation?

Margin call management is the process of continuously monitoring a client's derivatives positions and collateral to ensure sufficient funds are posted to cover potential losses. When a client's collateral falls below the maintenance margin due to adverse market moves, the prime broker issues a margin call, demanding immediate additional funds.

This prevents the broker from absorbing the client's losses in case of a default.

How Does a Prime Broker’s Clearing Service Mitigate Risk for Its Clients?
What Is the Difference between Initial Margin and Maintenance Margin?
How Does the Client Agreement Typically Address the Right of Rehypothecation?
How Does the Process of ‘Rehypothecation’ Affect a Prime Broker’s Client Assets?