What Is the Difference between Gross and Net Margining for Client Accounts?

Gross margining requires the clearing member to post margin with the clearing house for each individual client account, without offsetting long and short positions between different clients. Net margining allows the member to offset the positions of different clients and post a single, smaller margin amount to the clearing house based on the net risk.

While net margining is more capital-efficient for the member, gross margining provides greater protection for clients, as their collateral is not used to offset the risk of other clients and is easier to port in a default.