Margin

The transaction types in this category can be found on the "Entry" worksheet under the account transaction types.

Background

Futures positions are included in the valuation on the one hand via the securities account position and on the other hand in the form of margin postings. However, since the valuation of the futures position in the portfolio is fixed and desired, the task is to map the movements of the margins in such a way that they behave in a valuation-neutral manner.

Depending on the constellation, there are two correct variants for this in the Infront Portfolio Manager.

• Variant 1:
  

  Margins are posted to a separate account that is not created in the Infront Portfolio Manager and is therefore not taken into account.

  Margins do not play a role here. The futures position is valued exactly once in the securities account.

• Variant 2:
  

  Margins are booked to a separate account. A "normal" account takes care of the inflows and outflows from the account.

  The money is only moved from one account to another. There is no change in assets. The postings to the margin account and the normal account cancel each other out in terms of valuation.

Solution approach

In order to neutralize the margin postings on an account in terms of valuation, a special asset is shown which contains margins already paid and is offset against the assets. This is therefore a fictitious offsetting entry that does not require a separate account. As with the other special investments (fixed-term deposits, loans and forward exchange transactions), the account is created at the beginning of a futures position and disappears again at the end of the position.

An initial margin must therefore always be recorded first. In order to also map the recording of variation margins without prior recording of an initial margin, which is sometimes common in practice, it is also possible to enter an initial margin with the amount "0".

Implementation

The following transaction types are available in the "Margin" category of the Infront Portfolio Manager:

• Initial Margin
• Initial margin repayment
• Variation Margin

The transaction types of the "Margin" category described in the following sections should only be usedif no separate margin account is maintained and the margin movements take place on a "normal" account and thus the problem of double valuation exists. Otherwise, the procedure described above applies.