Is Variation Margin Paid in Cash or Collateral? ⎊ Path

Is Variation Margin Paid in Cash or Collateral?

Variation margin is typically paid in cash, as it represents the daily settlement of realized gains or losses and is designed to bring the account equity back to zero (or the margin requirement). However, in some markets or for specific arrangements, high-quality, liquid collateral may be accepted.

How Does the Daily Settlement Process Differ for Futures and Options?

How Often Are Funding Payments Typically Exchanged?

What Is the Significance of the “Quality” of Reserve Assets (E.g. T-Bills Vs. Commercial Paper)?

How Does the Daily Mark-to-Market Process Impact the Cash Flow of a Futures Trader?

What Is the Difference between Initial Margin and Variation Margin as Used by a CCP?

Is a Margin Call a Sign of Realized or Unrealized Loss?

How Does MTM Relate to the Concept of Realized and Unrealized Gains/losses?

What Is the Difference between Initial Margin and Variation Margin in Derivatives Clearing?

Glossar

Variation Margin

Collateral ⎊ Variation Margin represents a dynamic adjustment to posted collateral requirements in cryptocurrency derivatives markets, reflecting real-time mark-to-market losses on open positions.