Margin at Risk

Margin at risk (MaR) is a risk management measure that estimates the potential for margin calls or financial losses in a margin account due to market volatility. It assesses how much of the margin capital is at risk based on the volatility of the underlying assets in the portfolio. Traders use MaR to determine the likelihood of receiving a margin call, which would require additional funds or the liquidation of positions to maintain margin requirements.

Example

A trader uses margin at risk to assess the potential impact of a sudden market downturn on their margin account, ensuring they have enough capital to avoid a margin call.