Variation margin
Definition · Level 7 · Futures, rates & macro
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Daily cash settlement of futures gains and losses: after each session the clearinghouse marks positions to the settlement price, crediting winners and debiting losers.
Example
Long 2 ES, market settles 15 points higher → +$1,500 credited tonight.
Where Tradecraft teaches it
Level 7 · Futures, rates & macro, in the lesson “Margin, mark-to-market & hedging”: Performance bond, daily variation margin, margin calls, and how to hedge a stock book with ES.
Related terms
- Futures maintenance marginThe lower equity floor for an open futures position, set in dollars per contract.
- Initial marginPerformance-bond deposit required to open a futures position; the exchange’s clearinghouse sets the minimum and brokers can ask for more.
- 2s10sThe 10-year Treasury yield minus the 2-year yield, in bp: the headline gauge of curve slope.
- BackwardationCurve shape where later-dated futures trade below nearer ones.
- Base currencyThe first currency in an FX pair, the one being priced.
- BasisGap between the spot (cash) price and a futures price, usually spot − futures.