Definition for : Margin call

A Clearing house in the derivatives Market makes a margin call, i.e. a demand for additional payment, when an operator looks like it may make a loss. The operator's account is thus always in the black by at least the amount of initial deposit. If the operator does not meet a margin call, the Clearing house closes out the operator's Position and uses the deposit to cover the loss.
(See Chapter 49 Managing cash flows of the Vernimmen)
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