Hard concentration: clearing members want clarity from CCPs

FCMs complain they struggle to pass opaque margin calculations through to end-clients

It makes sense to charge extra margin for clients that have outsized derivatives positions in a particular instrument relative to the depth of the market. But how clearing houses are calculating this concentration margin makes a lot less sense to their members at the moment.

“It’s not very transparent what the composition of that concentration charge is, so how do you attribute that concentration charge back to the client?” asks the head of derivatives at a US futures commission merchant (FCM).

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