Series 3: 4.1.8.2.2. Cross Or Spread Margining

4.1.8.2.2. Cross or Spread Margining

Recall from Chapter Three that intermarket spreads are spreads involving the same commodity, with both positions expiring the same month but on different exchanges. When each leg of a spread appears on different exchanges, SPAN cannot compute a margin requirement for the entire position. Each leg would be margined separately as a distinct futures or options position, and its lower risks as a spread position would not be considered.

In 1989 the Options Clearing Corporation (OCC) introduced cross margining to allow the offsetting of hedged positions across multiple clearinghouses. Cross margining is desi