A | Glossary

Additional Margin
An additional margin serves to cover the extra collateral needed for the projected cost of closing a transaction. These potential closure costs can arise should - extrapolated from to the current market value of the portfolio - within 24 hours a notional adverse rate development were to occur (a so termed "worst case loss" situation). This applies to options and non-spread future positions.

American Option

An option that may be exercised on any trading day prior to the expiry of a futures contract.


Taking intentional advantage of simultaneous price, exchange or interest rate discrepancies of a financial instrument (stocks, bonds, currency, commodities, options) on different financial markets. In theory the arbitrage is without risk, i.e. offers a risk-free profit.

At the money (ATM)

An option whose strike price is approximately equal to the market price of the underlying.