Nodal Clear employs highly automated systems to support the clearing function. SWIFT messages are used for all initial margin and variation margin calls. Nodal Clear conducts two margin calls each trading day. The intra-day call is calculated at mid-day, with payments due at 2:00 pm Eastern Time (ET). The end of day call is calculated…
Nodal Clear currently accepts cash and letters of credit in US Dollars (USD) as market collateral. Applied letter of credit balances at any one Clearing Member are capped at the larger of 50% of that Clearing Member’s customer initial margin requirement or $100MM, unless otherwise specified. Letters of credit are not subject to haircut. Per…
Nodal Clear employs many controls to reduce the risk of default. These include strict membership criteria for acceptance into the clearing house, risk limit controls on clearing members and their participants, as well as twice per day variation margin calls to prevent losses from accumulating in an account.
Nodal Clear employs an expected shortfall methodology for its initial margin calculations. The calculation is calibrated to cover an expected loss to a 99.5% confidence level. All margin calculations are conducted at the portfolio level. As inputs to the portfolio calculation, Nodal Clear’s margin methodology employs return observations from recent trading activity (past one to…
Risk management is at the core of what Nodal Clear does. By employing strong risk management practices across all aspects of clearing, Nodal Clear significantly reduces the risk for all participants in the marketplace.
Nodal Exchange Nodal Exchange is a derivatives exchange providing price, credit and liquidity risk management to participants in the North American commodities markets. Nodal Exchange is a leader in innovation, having introduced the largest set of electric power locational (nodal) futures and options contracts and the largest set of environmental futures and options contracts in…
