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Margin Percentage

Under the Global Master Repurchase Agreement, the “Margin Percentage” is simply defined as “with respect to any Margin Securities or Equivalent Margin Securities, the percentage, if any, agreed by the parties acting in a commercially reasonable manner”.

Under the GMRA, the “Margin Percentage” is applied to the “Market Value” of Margin Securities or Equivalent Margin Securities.  In simple terms, the “Margin Percentage” is the haircut applied to the value of Margin Securities (reducing their value in the process) in order to provide a ‘cushion’ against adverse price movements in the value of those Margin Securities.

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