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What Types of Offsetting Positions Are Most Beneficial for Portfolio Margining?

The most beneficial offsetting positions are those with a high negative correlation, such as a long position in a futures contract and a short position in a call option on the same underlying asset. These positions reduce the net risk of the portfolio because if the underlying price rises, the loss on the short call is offset by the gain on the long future, leading to a much lower net margin requirement.

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