Net debit cap calculation determines the maximum negative position a clearing participant can hold during settlement cycles by multiplying collateral value by regulatory haircut percentages and applying clearing house risk factors.
How It Works in Practice
- 1Calculate base collateral value by summing cash deposits, securities holdings, and approved credit facilities at market prices
- 2Subtract any existing exposures, pending settlements, and required minimum margin to determine available net debit capacity
Key Metrics
| Metric | Formula |
|---|---|
| Cap Utilization Rate | Current net debit position / Available net debit cap × 100 |
| Margin Call Frequency | Number of margin calls triggered / Trading days in period |
| Settlement Success Rate | Successful settlements / Total settlement attempts × 100 |
Related Terms
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