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  1. 01 History
  2. 02 How does it work?
  3. 03 What happens each day?
  4. 04 Protection in a default
  5. 05 Find Out More
  6. 06 Is clearing the answer to all risks?

What happens each day?

Regular day

A clearing house has a regular daily cycle to process trades, this involves:

  • A halt to incoming trades at the end of the clearing day
  • Calculation the Variation Margin and Initial Margin for tomorrow's margin calls
  • Calculation of all cashflows on trades for settlement tomorrow
  • Calculation of any fees for using the service, for settlement tomorrow
  • Netting of all payments down to a single payment per currency
  • Production of detailed reports and data files for members, and delivery electronically
  • Issuing margin calls for tomorrow


The regular cycle assumes that the amount of margin held by the clearing house will cover market movements within each  day of trading. As a further risk measure, some clearing houses recalculate Initial Margin regularly during each day. If the amount of IM for any firm exceeded the assets held by the clearing house, a call can be made for additional assets during that trading day to top up their account.

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