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Iran turmoil lifts CCP margin to new peak

Created at 13 Jul · 3:35 AM1 source↑ Market-relevant
IN SHORT

Required initial margin held at 25 central counterparties climbed 9.2% to $1.4 trillion in the first quarter, reaching a new record. The largest increase was seen in unnetted client accounts.

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Key Numbers

$1.4 trillionrecord required initial margin at CCPs in Q1
9.2%increase in required initial margin
$657.2 billionunnetted client accounts margin
11.9%increase in unnetted client accounts margin
$596.8 billionhouse accounts margin
7.5%increase in house accounts margin
$137 billionnetted client accounts margin
1%decrease in netted client accounts margin

Who's Involved

25 central counterparties (CCPs)
posted sharp Q1 increases in required initial margin

↳ Why This Matters

The significant rise in required initial margin at central counterparties indicates increased market volatility and potentially higher risk appetite or hedging activity, driven by geopolitical events like turmoil in Iran.

Key facts

  • Required initial margin at 25 central counterparties reached a record $1.4 trillion in Q1.
  • This represents a 9.2% increase from the previous quarter.
  • Unnetted client accounts experienced the largest growth, up 11.9% to $657.2 billion.
  • House accounts grew by 7.5% to $596.8 billion.
  • Netted client accounts saw a 1% decrease, totaling $137 billion.

Required initial margin held at 25 central counterparties (CCPs) climbed 9.2% to a record $1.4 trillion in the first quarter. The largest increase was observed in unnetted client accounts, where margin rose 11.9% to $657.2 billion. House accounts saw a 7.5% increase, reaching $596.8 billion, while netted client accounts experienced a 1% drop to $137 billion.

Frequently asked questions

Required initial margin is the amount of collateral that clearing houses require from their members to cover potential losses on derivative trades.

CCPs act as intermediaries between buyers and sellers in financial markets, reducing counterparty risk by becoming the buyer to every seller and the seller to every buyer.

Unnetted client accounts saw the largest increase in required initial margin, rising by 11.9%.

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How It Developed

Required initial margin held at 25 central counterparties climbed 9.2% to $1.4 trillion in Q1.
This level represents a new record for initial margin.
Unnetted client accounts saw the largest increase, rising 11.9% to $657.2 billion.
House accounts increased 7.5% to $596.8 billion.
Netted client accounts dropped 1% to $137 billion.

Sources

T1
Iran turmoil lifts CCP margin to new peakRisk.net

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