Manage Transactions When You Use Variation Margin Overrides

The Book Trade tool and transaction panels applicable to futures, future options, and cleared swaps consider any entity-level override when assigning the variation margin setting on inbound transaction messages to ensure that the positions in Eagle Accounting have the correct, overridden value where applicable.

How the Book Trade Tool Identifies Panels for Futures and Options on Futures with Variable Margin Override Rules

The Book Trade tool considers the variation margin override rules you set up when you book a futures or an options on futures trade for an entity.

When you use the Book Trade tool in Accounting Center to manually book a trade for a future or options on futures, you initially select the entity and security for which you want to book a trade. The Book Trade tool considers the security's Variation Margin setting in order to display the appropriate panel to open or close the trade. For example, if you are booking an open for a future that uses variation margin, you can select the Future with Variation Margin panel. Otherwise if you are booking an open for a future that does not use variation margin, you can select the Open Future panel instead. 

If you want to book a trade for an entity/processing security type grouping that uses a variation margin override, the transaction should not use variation margin even if the security is set up to use variation margin. If you select a security where the security master record has Variation Margin set to Yes, the Book Trade tool considers whether a variation margin override rule is in effect for the selected entity/security in order to allow you to enter the trade using the appropriate panel. For example, if you are booking an open for a future that uses variation margin, but you are booking the trade to an entity with a variation margin rule in effect for futures, Book Trade tool allows you to use the Open Future panel rather than the Future with Variation Margin panel.

How Transaction Panels Reflect Variation Margin Override Rules

For futures, options on futures, and cleared swap trades, all transaction panels that reference the security's Variation Margin (tag 4533) setting and Cleared Security (tag 5027) setting additionally consider the variation margin override rules you set up for the entity when you use those transaction panels. The transaction panels apply the variation margin override for those portfolios/processing security types where you do not want the system to calculate variation margin. For example, this affects open and close transactions, buy, sell, write, conversion, receive, exercise, and assign transactions. This applies to both the transaction panels you can access in the Book Trade tool and to the related transaction default message streams.

For example, you set up a future security that has the Variation Margin field equal to Yes. You set up portfolio ABC to calculate variation margin for futures. When you book a trade in portfolio ABC to open the future, the Book Trade tool allows you to select the Future with Variation Margin panel. The panel displays a value of Y for Variation Margin, indicating that Eagle Accounting calculates variation margin for that security. You also set up portfolio DEF with a variation margin override rule so that that portfolio does not calculate variation margin for futures. When you book a trade in portfolio DEF to open the future, the Book Trade tool allows you to select the Open Future panel rather than the Future with Variation Margin panel. The Open Future panel displays a value of N for Variation Margin, indicating that Eagle Accounting does not calculate variation margin for that security as a result of the override. 

For cleared swaps with multiple legs where there is a variation margin override rule in place for the entity and the contract level security's processing security type, the transaction panels reflect the variation margin override rule such that the contract and legs do not use variation margin.