Hello. Could you tell me about margin. I attached printscreen below. what do columns "start period" and "end period" mean? i see different margin for each period.
Near months are more volatile (VIX is the same). So as a contract gets closer, it's required margin will increase. GAT
There are also heating season effects visible -- which surprises me, given the growth of natural gas as a baseload fuel source for continental U.S. (Henry Hub) power plants. I would think that summer/year'round usage would have eclipsed natural gas' seasonal demand (winter 'peak'iness), but it's there in the margin, all the way out (2022) -- an extra bit of margin for winter season. "Huh." My utilities knowledge is a bit stale at 15years away, but apparently things have not changed as much as I'd thought.
I asked our risk manager , John Thorpe: Start and End refers to the range of contract months assigned to the particular maintenance margin requirement. To arrive at your Initial spec requirement, make sure to multiply the maintenance req. by 110%. I think a word of caution is in order about good faith deposit amounts set by the exchanges. Just because the volatility scans in the deferred months are smaller, less than the "front" months, does not mean the market price for those deferreds can't swing beyond the initial margin requirement, On the contrary, “liquidity in markets is, more than anything, a function of confidence, though that confidence is abundant now, it can evaporate in an instant.” Please pay attention to the Open Interest and volume for any product you consider trading as the deferred markets are largely used by large commercial concerns and turn over their hedging portfolios infrequently.