Increase in margin calls on the exchange
The fluctuation experienced after the stock market, which was closed after the earthquake disaster, started to operate again on February 15, also increased the calls for collateral in the futures and options market. On Monday, February 27, the margin call at VIOP was recorded as TL 430 million.
EBRU USTA/BLOOMBERG HT MONEY MARKETS MANAGER
Borsa İstanbul was closed for 5 trading days after being open for 2 trading days after the earthquake disaster. Then, Borsa Istanbul, which was opened on February 15 with the regulations from many regulatory institutions, recorded a limited increase last week and closed the week at 5,058 points with an increase of around 0.6 percent and an increase of 32 points.
After the rally in Borsa Istanbul in 2022, the highest closing level was seen on January 2, with the level of 5,661.10 points. The closing level of the BIST-100 index, which saw hard sales in January 2023, decreased by 12 percent to 4,976 points.
Before the earthquake disaster on February 6, the closing level on February 3 was just below 5,000 points, while sales deepened after the earthquake. After 5 business days when Borsa Istanbul was closed, the closing level was 4.505 points on the previous day, while the stock market, which was opened on February 15 with the measures, recovered and rose above the level of 5 thousand points again.
Margin calls increased
Margin calls of investors who remained in reverse positions in the Futures and Options market increased in February. During February, the cumulative margin call at VIOP increased to TL 3.0 billion. Especially after February 15, when volatility increased, a margin call of 345 million TL was made in just one day. On February 27, this amount increased to 429.9 million TL.
After the earthquake, the Capital Markets Board had facilitated the capital adequacy of the intermediary institutions.
The CMB also signed regulations on the capital adequacy of intermediary institutions on February 14.
Accordingly, until 30 June 2023, in the capital adequacy tables prepared by brokerage houses, the position risk ratio for the stocks taken into their own portfolios is over 3 percent instead of 10 percent, and the position risk ratio for “Other customers” monitored under the loan account is over 4 percent instead of 8 percent. will be calculated.
In the calculation of the general transaction limit to be made in accordance with Article 7 of the Communiqué on Overdraft Transactions until 30 June 2023, it was decided not to take into account the loans extended to customers who have a residence, office address or account in the earthquake zone as of 6 February 2023.
The initial equity protection rate, which was previously determined as 35 percent, will be applied as 20 percent until April 10, 2023.
What is a margin call?
Risk management in the market is done by Takasbank. Real-time transactions are withdrawn and converted into positions by Takasbank, and “collateral to be found” is calculated according to the last open position and parameter file data for the updated accounts.
