Book Open/Close Trades for Futures with Variation Margin

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Last updated: Jul 19, 2023 by Nancy Cohn (Deactivated)
2 min read

In the Future with Variation Margin panel, you can manually book an open and close trade for a future with variation margin. Commissions and fees are added to the notional amount used for calculating the variation margin. The fees are reflected in cash when the variation margin process is run for the trade date, approved, and settled. The system handles both full and partial terminations.

This article assumes you are familiar with the entity and security level elections that have been made for processing a future with variation margin. For example, you must enter a value for the Net Futures Positions field. If you set this field to Yes, the system nets the long and short positions into a single long position. If you set this field to No, the system creates two separate long and short positions. Additionally, you must enter a value for the Futures Clearing Broker Code field. The system requires that you use the same clearing broker when you book an open and close trade for a future contract. You can hard code the field to ensure the same clearing broker is used for all futures transactions. You can access these fields using the Create/Edit Entity and Create Master Fund panels.

To manually book an open/close trade for a future with variation margin:

  1. In the Accounting Center, in the left navigation pane, click Transactions > Trades > Book Trade/Rebook Trade > Book Trade.
    You see the Book Trade workspace.

  2. Complete the options in the Search Details pane and click Search.
    You see the search results based on the criteria you selected.

  3. Select the row with the security you want to trade.

  4. On the Book Trade tab, in the Actions group, click Action Rules, point to Open or Close, and then click (Long) Future with Variation Margin or (Short) Future with Variation Margin.
    You see the Future with Variation Margin panel.

  5. Complete the options on the Future with Variation Margin panel.

  6. Click Submit.
    Once the trade is booked, it follows all core accounting processes. The system uses the core cost tags to store the notional cost values at the position, open, and close Cost object levels for futures.
    You are ready to calculate and approve the variation margin.

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