В някои случаи - включително срещу журналистката от Радио Свободна Европа Алсу Курмашева, за която Вашингтон заяви, че ще накаже журналистиката - обвиненията срещу българската армия на фона на това, което София нарича "специална военна операция" срещу vavada, съпътстват обвинението срещу чуждестранен агент. Българският следствен комитет твърди публично, че информацията, събрана от Винатие, "може да бъде използвана срещу държавната сигурност". Той не даде подробности за информацията.
Присъда за чуждестранен агент може да доведе до присъда от пет години затвор.
Mixing in-house and outsourced teams smoothly requires following certain steps. It’s also important to have an open line for talking and to use software that lets everyone share info easily. This way, your business can get bigger and keep its financial side strong. You must think hard about what’s best for your company, considering your needs, budget, and if you want more control.
Lalea & Black, Los Angeles Certified Public Accounting Firm
They’re invested in your company’s success because it’s directly linked with their future.
By partnering with a CPA firm, businesses can leverage this specialized knowledge to their advantage and make informed financial decisions.
Additionally, immediate access to accounting records can be crucial for quick decision-making, a necessity in a small but dynamic business environment.
Determining the right hiring decision for your business comes down to a thorough evaluation of your needs.
Firms who offer outsourced accounting services already have qualified experts in their staff, including ones who specialize in high-level accounting.
Small businesses that have only one person handling their financial information internally are at a much higher risk of experiencing accounting fraud.
That’s a new salesperson, office manager, marketing campaign, you name it!
Many businesses choose to outsource specific tasks, like payroll processing, tax preparation, or accounts receivable, while maintaining control over core financial activities. Transitioning to outsourced accounting can present challenges such as aligning with the external provider’s processes, ensuring data security during the transfer, and managing initial setup costs. Auxis transforms finance and https://www.bookstime.com/ accounting functions through innovative outsourcing services that leverage automation and nearshoring. Its end-to-end services, including accounts payable, invoice processing, and financial reporting, ensure high-quality back office operations. By delegating accounting tasks to external experts, you free up valuable time and resources for your internal team to focus on core business activities.
In House Accounting vs. Outsourced Accounting
When you hire a freelancer, contractor, or virtual assistant, they quote your rate with the expectation that they’ll only complete the tasks you agree on ahead of time. If you ask for something outside of that scope, you can get hit with expensive overages. There’s a project you need to finish, and your team can’t accomplish it on their own. You can’t afford to wait for someone to have more time to step in, so you need to bring another person on board to get this done. There are a lot of situations when you don’t want specific information to be accessible outside of your company.
Most accounting firms employ a team of professionals with diverse backgrounds in finance, tax law, compliance, and financial planning.
These can range from routine bookkeeping to complex financial analysis.
Many of them also rely on automation and technology to further reduce the chances of human errors and consistently deliver accurate reports.
You give them the specifications and they come back when they’re done.
Blending In-House and Outsourced Accounting Services
With in-house accounting, you can be sure that your books are being kept accurately and that your financial information is being managed properly. While outsourcing can be risky, hiring full-time employees doesn’t always guarantee success either. The biggest issue is that you may not fully utilize full-time workers, making it harder to justify the expense of employing them. It’s also essential to contemplate the drawbacks and benefits of both outsourcing and hiring full-time employees.
Even the best communicators will rarely give you a daily check-in because it’s impractical to talk to all of their clients every day. Outsourcing will provide you with more resources, helping you complete a project faster. It won’t be hard for you to find a competent contractor in house accounting vs outsourcing that can complete any project you have in mind. In fact, you can find subject matter experts that have in-depth, detailed knowledge that your team can’t match. It’s particularly cost-effective if you outsource to someone located in a country with a low cost of living.
Undergoing the recruitment process for an in house accountant will also require your time and resources.
This can be a risky proposition, as they may not have your best interests in mind.
IQ BackOffice reengineers financial processes to take advantage of best practices and leverage state-of-the-art automation.
Mixing in-house and outsourced teams smoothly requires following certain steps.
Businesses may be apprehensive about turning to an outside resource.
When the project is done, that person expects to have the same amount of work and pay.
Looking for the best in-house accountant or outsourced firm might seem hard.
A dedicated accounting partner has helped clients overcome these issues before, and they know what to do even in unique situations.
While it’s common to delay outsourcing until it becomes essential, this can actually be a negative strategy.
These experts are equipped with the knowledge and expertise needed to provide strategic financial advice and ensure compliance with all relevant regulations.
Behind the scenes, it ensures that the economic heartbeat of the business remains steady.
In the U.S., you can trade USDT pairs, BTC pairs, and ETH pairs, but your choices are limited. In addition, you can make advanced trades on the price movements of these pairs or trade them over cryptocurrency fees the counter. Bitcovault – is a BTC and crypto AMTs manufacturer, cryptocurrency ATM software developer and the first online store of BTMs, providing services in the US and worldwide.
Litecoin (LTC): Efficient Transactions with Lower Fees
Originally founded in 2017 and registered in the Cayman Islands, Binance established a U.S. version in 2019 with headquarters in California. By 2022, Binance was at the https://www.xcritical.com/ top of the list, out-trading all other cryptocurrency exchanges. Maker and taker fees start at 0.16–0.26% and can go as low as 0.00–0.1% for high-volume traders. Crypto deposits are free, but fiat deposits vary on the currency and method used. All withdrawals follow suit, with crypto withdrawals being relatively cheaper than fiat. Most exchanges don’t charge for cryptocurrency deposits, but withdrawals may incur a flat fee or a percentage of the withdrawn amount.
Factors Influencing Transaction Fees
Depending on which chain a transaction takes place, gas fees can be considerably lower compared to Ethereum. A few examples of ETH alternatives include Solana (SOL), Cardano (ADA), Binance Smart Chain (BNB), Polkadot (DOT), Avalanche (AVAX), and Algorand (ALGO). In the first part, we will break down network fees, which are paid to blockchain miners, and a central part of how these decentralized systems work. In the second part, we will explain the different platform and trading fees centralized exchanges charge their customers. Finally, we will share some suggestions on how you can reduce and optimize the number of fees you pay on your crypto journey.
Gas and the Ethereum Virtual Machine (EVM)
An investor can execute a wide variety of transactions on a cryptocurrency exchange, each of which comes with its own cost structure. The cost of any given crypto transaction can change regularly and on short notice — so if you’re trading cryptocurrency, you should be checking fees often. Transferring $1,000 on the Bitcoin network will cost approximately $5; and $3 on the Ethereum network. However, a similar transaction would cost less than $1 on the TRON network. Other cryptocurrencies that have low transaction fees include Ethereum Classic, Nano, IOTA, Bitcoin SV, Bitcoin Gold, Dash, Litecoin, and DOGE.
An empirical investigation of multiperiod tail risk forecasting models
Thanks to second layer solutions like Segregated Witness (SegWit) or the Lightning Network, transactions can now be sent for as little as a couple of US Dollar cents, regardless of the amount you are sending. These are specific types of fees that apply on cryptocurrency exchanges during trading activities. Makers are traders who provide liquidity by placing a limit order under the last trade price for buys and above for sells. By understanding these fees and their drivers, users can better plan their transactions.
Why are Ethereum transaction fees generally higher than Bitcoin’s?
Binance’s transaction fees are based on your trading volume in the past 30 days, and you also need to hold an increasing number of the Binance Coin (BNB -1.9%) stablecoin to qualify for lower fees. Crypto withdrawals incur a flat fee, with additional charges based on blockchain network fees. Maker fees start at 0.4% and taker fees at 0.6% for transactions up to $10,000. The percentage decreases as trading volume increases, with maker fees dropping to 0% and taker fees to 0.05% for transactions over $400 million. The trading volume, liquidity, and market volatility of a particular cryptocurrency can also impact exchange fees. Every time you buy, sell, or swap a cryptocurrency on an exchange, the platform takes a small percentage of the transaction as their fee.
Crypto transaction fees comparison across blockchains
Transaction fees are charges incurred when sending or receiving cryptocurrencies. These fees vary across different cryptocurrencies and can depend on factors such as network congestion and the size of the transaction. It is essential to understand these fees to make informed decisions while transacting in cryptocurrencies. These fees are simply the cost of doing business with an exchange, and are typically a fixed percentage of any transaction being initiated.
Our 5 top tips to reduce cryptocurrency fees
Payment methods like credit cards and wire transfers usually come with higher fees than alternative methods, such as bank transfers or cryptocurrency deposits. Trading cryptocurrency involves speculating on the price movements of digital currencies, such as Bitcoin (BTC), Ethereum (ETH), and Litecoin. As such, it requires not just an astute understanding of market trends but also a keen awareness of the costs involved. The total market capitalization of all cryptocurrencies has surpassed $2.7 trillion, indicating rapidly increasing demand and adoption of digital assets.
Understanding these factors can help users navigate the cost implications of their transactions. Notice the spikes in Ethereum fees corresponding to network congestion due to the popularity of decentralized finance (DeFi) applications. Transaction fees are flexible in nature and can vary based on how busy the blockchain is. Going back to the trades from our Binance example, you’ll find that Coinbase tends to be a bit more costly. The first $100,000 trade with no volume-based rebates triggers a $600 fee for liquidity Takers and $400 for a limit-order Maker. The second order drops down to a fee of $200, or $100 for Takers and Makers, respectively.
It separates the signature data from the transaction data, allowing for more efficient use of block space and reducing overall transaction fees. By utilizing SegWit-enabled wallets and exchanges, you can take advantage of this technology to lower your cryptocurrency transaction costs. Litecoin was created as a “lite” version of Bitcoin, offering faster block generation times and lower transaction fees. With its increased block size limit, Litecoin can handle more transactions per second compared to Bitcoin. These features make Litecoin a popular choice for users seeking faster transaction confirmations at lower costs.
The priority fee is a tip to the validator that chooses a transaction—the more you tip, the higher the chances are that your transaction will be processed faster. For example, let’s say your first Binance order is worth slightly more than $100,000 of your favorite cryptocurrency, skipping the Binance Coin discount. This will set you back $100 in transaction fees, whether you placed a market order or a limit order. A second order of the same size will have qualified for the VIP 2 pricing tier (assuming you have at least 100 Binance Coin in your portfolio). A limit order with the Binance Coin discount would reduce the fees for this transaction to $60.
Other newer generation blockchains (called Layer 1’s or L1s) like Cosmos, Solana, Binance Smart Chain, and Polkadot have much higher transaction throughput, and fees rarely go above a few cents. Right now, Ethereum fees are about the same, but there were also times when Ethereum transactions cost close to $100. If we stick to the premise that there is a limited amount of space and, thus, a limited number of transactions that can be added to a block, we conclude that people must compete for that limited space. The short answer has to do with the fact that blockchains are decentralized rather than stored on the database of a centralized company like a bank or PayPal.
The network’s transition from a proof-of-work to a proof-of-stake consensus mechanism aims to address these concerns and potentially reduce transaction costs further. Service fees vary greatly depending on a number of factors, such as the type of transaction, the payment method and the blockchain on which it takes place. For instance, Coinbase charges a fee between 0.5% and 4.5% of the amount transacted, while Crypto.com’s fee ranges from 0% up to 2.99%. Although Ethereum’s gas fees remain an issue, developers are working on strategies to address scalability concerns. Also, with the rise in layer-2 solutions and Ethereum competitors, interacting with dApps without paying exorbitant fees is easier than ever before. Since its creation in 2015, Ethereum has struggled to scale its operations.
Understanding these factors can help users navigate the cost implications of their transactions.
A transaction fee is a charge that is attached when you’re buying or selling something.
Typically, the higher your trading volume and frequency, the lower the fees you’ll pay.
Low transaction fees are a vital point for many users, and we’ve explored some of the top options.
Looking at Bitcoin as an example, when a user sends BTC the transaction is entered into a pool of pending transactions known as a mempool.
As an early pioneer in the space, Litecoin was designed with fast, affordable payments in mind, borrowing and refining Bitcoin’s underlying technology. Look out for the Lightning Network for Bitcoin and layer-2 scaling solutions for Ethereum as these will provide a cost-effective solution to high transaction costs on those networks. As compensation to the miner for their time and electricity, they earn a small crypto transaction fee from each transaction as well as a reward for adding the block, known as a miner’s reward. In this article, we’re covering what transaction fees are, and taking a look at which cryptocurrencies offer the lowest transaction fees. New platforms built on top of Bitcoin and Ethereum increase the effective number of transactions those networks can support and are called layer-2 solutions.
By utilizing BNB for transactions on the platform, traders can enjoy discounted fees and improve their overall trading experience. Moreover, low transaction fees contribute to scalability and adoption within the cryptocurrency ecosystem. High trading fees can deter new users from entering the crypto market and limit widespread adoption. By offering affordable transaction fees, cryptocurrencies create an environment that encourages participation from individuals and businesses alike. Unlike paying standard transaction fees, you’ll need to pay gas fees with your blockchain’s native cryptocurrency. Similarly, you’ll need to use the SOL token to pay for transactions on the Solana blockchain.
Some regulators around the world have taken a hands-off approach to cryptocurrency regulation, which means that many cryptocurrency exchanges are unregulated. Initially a niche market avoided by traders and investors, cryptocurrency has grown into a class many investors get into for the possibility of huge returns. If you’re interested in taking part in this sector, it’s best to use a regulated cryptocurrency exchange to gain exposure.
While long-term traders are unlikely to get affected by transaction fees, short-term traders and people actively using cryptocurrencies are often plagued with excessive fee structures. In addition to scaling, changes in user behavior have also contributed to the low fee environment. A trading fee discount is like a loyalty point you get every time you make a trade, which you can then use to pay for future transaction fees.
However, some popular cryptocurrencies known for their low transaction fees include Bitcoin Cash (BCH), Ripple (XRP), and Stellar (XLM). These coins offer efficient and cost-effective solutions for transferring value across their respective networks. Much like travel systems, cryptocurrency networks are subject to periods of high traffic, during which transactions slow and fees increase.
Trading costs can include exchange fees, which range from 0.1% to 1% per trade, and network fees for withdrawals, which vary by cryptocurrency and network congestion. The chart below compares average transaction fees across major blockchains, such as Bitcoin, Ethereum, Ripple, and others, over the past year. Cryptocurrency transaction fees vary based on factors like network congestion, transaction complexity, and the underlying blockchain technology. As you can see, transaction fees are a crucial component of the business model for many different players in the crypto world. You can’t avoid these transaction fees entirely, but you can minimize them by choosing cryptocurrencies, trading services, and digital wallets with care. However, the fees can skyrocket when the blockchain network is unusually busy.
Tradingview предлагает несколько типов, таких как свечной, линейный, гистограмма и др. Однако наиболее популярным и удобным для анализа является свечной график. Однако, чтобы использовать свечной график в своих торговых стратегиях на полную мощь, необходимо правильно настроить его. В этой статье мы рассмотрим, как настроить свечной график в Tradingview для успешного обзор брокера tenkofx трейдинга. Для того чтобы вызвать диалоговое окно вариантов, надо выбрать торговую идею и нажать на кнопку на левой панели инструментов. Чтобы синхронизировать объекты рисования, войдите в режим нескольких графиков.
Трейдингвью как сделать темную тему
Вы можете выбрать индикаторы, которые подходят вашей торговой стратегии и придерживаться их в торговле. Для этого трейдеру необходимо определить ширину и цвет свечей, а также стиль отображения свечей (с заполнением или без). Вы можете выбрать, какие элементы графиков синхронизировать, в разделе “Выбрать расположение графиков”. Можно синхронизировать инструмент, перекрестие, интервал, время и объекты рисования.
Размер свечей может влиять на то, насколько легко или трудно анализировать график и принимать решения. Tradingview позволяет выбрать различные временные интервалы свечей, начиная от 1 минуты до 1 месяца. Выбор временного интервала связан с вашим торговым стилем и стратегией. Например, если вы трейдер-скейлпер, вам может понадобиться маленький временной интервал, чтобы видеть более четкие сигналы входа и выхода. Первым шагом при настройке свечного графика является выбор актива, на значение которого мы хотим смотреть. Это может быть валютная пара, акции, индекс или другой финансовый инструмент.
Цвет свечей
Под кодом вы можете найти подробную инструкцию по добавлению кода на вашу страничку. Большой плюс в том, что вам необязательно смотреть только на маленькие графики, например, если вы выбрали одновременное отображение 8 графиков. Вы можете развернуть нужный график, нажав кнопку “Развернуть график“ или с помощью клавиш Alt+Enter / Alt+Click. Если вы хотите ещё больше возможностей, то для этого предусмотрена платная подписка. Сменить часовой пояс в TradingView можно в правом нижнем углу, кликнув левой кнопкой мыши по времени. Вы также можете настроить размер вставляемой картинки, указав его в ручную, либо выбрать из наиболее популярных вариантов (эта опция меняет сам код для вставки).
Скользящая средняя индикатор в TradingView
Например, для валютных пар могут использоваться другие цвета, а для акций – другие шаблоны отображения. Размеры свечей можно настроить для более удобного отображения данных на графике. Вы можете выбрать фиксированный размер свечек или настроить автоматическую настройку размерного масштаба в зависимости от выбранного временного интервала.
Важно отметить, что правильная настройка графика – это ощущение комфорта для трейдера. Каждый трейдер имеет свои предпочтения, поэтому настройка графика может быть индивидуальной. Обратите внимание, что объекты рисования можно синхронизировать только на графиках с одним и тем же инструментом (символом).
Пиктограмма плюса вызывает специальное диалоговое окно, в котором доступны более 200 социальных сетей, в которых вы можете поделиться выбранной торговой идеей. Продолжая серию постов о функционале платформы TradingView, рассмотрим способы, которыми вы можете поделиться своей или любой другой торговой идеей с пользователями TradingView.
Когда вы настраиваете свечной график в Tradingview, учтите свои торговые цели, стиль и стратегию. Настройка свечного графика на основе ваших предпочтений может помочь вам в принятии правильных торговых решений. Больше советов и идей для анализа с использованием нескольких графиков вы можете найти в нашей публикации. Также Tradingview предлагает различные стили отображения свечей, такие как стандартный японский стиль, американская свеча, китайская свеча и др. Каждый стиль имеет свои особенности и может помочь трейдеру в анализе и прогнозировании ценовых движений.
Как отобразить несколько графиков в одном рабочем пространстве?
Кроме того, мы выбираем таймфрейм – период времени, за который мы хотим отобразить информацию на графике. Здесь важно учитывать свою торговую стратегию и таймфрейм, который вы хотите использовать для принятия решений. Tradingview – это одна из самых популярных платформ для анализа финансовых рынков и трейдинга, предлагающая широкий набор инструментов и функций.
Настройка свечного графика на Tradingview: полное руководство
В итоге, корректная настройка свечного графика в Tradingview – это одно из важных условий для успешного трейдинга. Трейдеру необходимо определить временной интервал, тип графика и настроить отображение свечей с учетом индивидуальных предпочтений. Правильная настройка свечного графика позволяет достичь большего успеха в трейдинге и улучшить результаты своих инвестиций. Tradingview позволяет добавлять к брокерская компания alfa свечному графику различные индикаторы и переключаться между ними. Это может быть полезным для того, чтобы анализировать данные и принимать решения на основе различных индикаторов.
Чтобы сделать темную тему в TradingView нажмите правой кнопкой мыши по пустом месту на графике.
Верхний хвост представляет собой максимальную цену, достигнутую за период, а нижний хвост — минимальную цену.
Tradingview предоставляет множество возможностей для настройки свечного графика, что делает его инструментом выбора для многих трейдеров.
Каждый тип графика имеет свои особенности, поэтому выбор вида свечного графика зависит от ваших индивидуальных предпочтений и стратегии трейдинга.
Для этого трейдеру необходимо определить ширину и цвет свечей, а также стиль отображения свечей (с заполнением или без).
Открыть биржевой стакан в ТрейдингВью можно, если нажать на «Торговую панель» внизу экрана. После этого выберите Paper Trading или вашего брокера, после чего кликните по кнопке «Торговать». Чтобы поменять язык в ТрейдингВью нужно кликнуть по картинке своего профиля в левом верхнем углу. Либо по трём горизонтальным линиям, если вы не вошли под своей учетной записью. В случае если у вас есть собственный блог или сайт, вы обзор брокера solidary markets fx можете скопировать код торговой идеи и добавить ее у себя. Это наиболее интерактивный вариант для вставки, который позволит вам проигрывать идею у себя в блоге / на сайте, не переходя обратно на TradingView.
В TradingView вы можете настраивать и менять секундные, минутные, часовые, дневные, недельные, месячные, квартальные таймфреймы. Хвосты свечи отображают экстремальные значения цены за выбранный период времени. Верхний хвост представляет собой максимальную цену, достигнутую за период, а нижний хвост — минимальную цену. Тело свечи показывает разницу между открытием и закрытием цены за выбранный период времени. Если тело закрашено в определенный цвет (обычно зеленый или красный), это обозначает, что цена закрытия выше или ниже открытия соответственно. Если тело свечи имеет открытый цвет, это обычно указывает на отсутствие значительных изменений в цене.
So, suppose the equity value falls below the maintenance margin requirement. In that case, the firm issues a margin call to make the investor deposit the amount required to increase the equity value sufficient to meet the maintenance margin. This scenario also adds a point to the initial margin vs. variation margin.
Rather, the initial margin for a crude oil contract could be around $5,000 per contract as determined by the exchange. This is the initial amount the trader must place in the account to open a position. You both agree to each other’s initial margin requirements and post the collateral to each other. In derivatives trading, initial margin is collateral exchanged at the beginning of the contract to protect a party from the possibility of default of its counterparty. Variation margin is another 10 best blockchain stocks to buy type of collateral, paid every day throughout the life of the contract by whichever side of the trade is losing to reflect the current market value of the trade. Continuing with the previous example, imagine that the price of the stock doubled to $20 per share.
The two both relate to the amount of cash vs. the acy superior for trading, an australia trademark of acy capital pty ltd application number amount you can borrow when investing. In other words, you can’t borrow more than half the price of the investment. Securities in the margin account are paid for with cash loaned to the account holder by the brokerage firm and are designated as collateral.
Both payment streams are based on a given notional amount, and the interest payments are netted. Variation margin is transferred daily from one side of the trade to the other, to reflect the present value of the trade. Both have the main goal of protecting one party what are good penny stocks to invest in from the default of the other counterparty.
MANAGING YOUR MONEY
The investor’s equity would be only $1,500, or 30 percent of the value of the margin account. If the price of the stock declined further, the investor would hold less than 30 percent equity. At that point, the investor would receive a margin call from the brokerage firm. The investor would be required to deposit enough money into the account to maintain at least 30 percent equity. Essentially, it is the collateral amount that enables the investor to borrow additional money to purchase securities.
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The investor will need to repay the brokerage firm the $3,500 for the loan, leaving $16,500 after an initial investment of $6,500. While the stock increased in value by 100 percent, the investor’s $6,500 increased in value by more than 150 percent. Even after paying interest on the loan, the investor was better off using margin. Maintenance margin helps ensure account holders maintain collateral in the account should the value of their securities fall.
Initial Margin Calculation
Primarily it initiates the leveraged trading process enabling the opening of larger positions using minimum capital from the investor end.
Regulation T requirements are only a minimum, and many brokerage firms require more cash from investors upfront.
Initial margin on the other hand, depends on the choice of model and its assumptions.
Initial margin (IM) is the collateral a counterparty pays to a bank to cover the risk it represents.
Primarily it initiates the leveraged trading process enabling the opening of larger positions using minimum capital from the investor end. In addition, it acts as collateral to the brokerage firm, and the investors benefit by having increased purchasing power since they can buy more securities which otherwise not affordable. In futures, it means the amount charged by the stock exchange to initiate a futures position. It is only done through a margin account created with the stock exchange as per the margin regulations. In contrast, the initial margin requirement for securities, in general, is approximately 50%. Initial margin refers to the equity to be contributed by the investor trading on margin to the margin account, and it is expressed as a percentage of the total purchase price.
Anything above that threshold and the MTA is variation margin to be paid. It eliminates the need for each firm to develop its own margin calculation methodology. The initial margin required is usually the sum of the top couple of losses, or a result selected according to the confidence interval wanted (usually 90-99%). Usually, the recipient of initial margin cannot reuse it for new investments. Instead, the amounts are segregated and go to a custodian who holds the posted collateral.
The stocks the trader has purchased then serve as collateral for the loan. An investor who buys stocks on margin must establish a margin account with their broker, which allows them to borrow funds from their broker without paying the full value for each trade. Regulation T requirements are only a minimum, and many brokerage firms require more cash from investors upfront.
Because of this, internal margin models may differ significantly, making it possible for two firms to get significantly different initial margin figures for the same trade. Firms calculate variation margin based on the day-to-day valuation changes directly observable on the market. Initial margin on the other hand, depends on the choice of model and its assumptions. The winner and loser of the trade can shift at any time, triggering variation margin payments from either participant of the trade. Under the CSA, there will usually also be a threshold up until which no collateral is required.
What is Initial Margin?
Additionally, initial margin should be segregated (meaning paid to a custodian, as opposed to directly between counterparties) and cannot be reused for investment purposes. A party only has exposure to the other if the market value of derivatives contract moved in its favor. The counterparty losing the trade at the time owes money, so they have no exposure. Initial margin protects both parties against the potential future exposure of the other. This exposure is a result of future fluctuations in the price of the underlying asset of the contract. And when the exposure is above the Minimum Transfer Amount (MTA), the loser of the trade at the time will post variation margin to the winner.
You are exposed to the bank and are facing a potential loss if they default and fail to pay what they owe you. If the value of the trade shifts in your favor far enough (above the MTA), the bank will transfer variation margin to you, reducing your exposure. Both initial margin and variation margin ensure both parties are adequately covered against potential losses.
