In an increasingly challenging financial environment, investors are looking to single stock futures to help reduce the cost to carry long positions, increase yields on short positions, and to synthetically participate in the stock lending process without the need to locate or borrow for short stock positions. Stream Margin integrates single stock futures into its credit monitoring workflow, allowing for the hedging of single stock futures with other stock and option components to help provide various levels of margin relief. Stream Margin also recognizes Exchange for Physical (EFP) transactions cleared through the Options Clearing Corporation (OCC) and performs accurate margin calculations on the resulting position landscape, which can help reduce transaction costs.
Gerry Murphy, president of SunGardâs brokerage and clearance business, said, âFinancial institutions have long needed a tool for credit margining and clearing, especially as the current financial crisis demands improved controls over counterparty risk and cost. SunGardâs Stream Margin helps firms earn higher returns on assets while helping reduce counterparty risk and eliminate the need to borrow on short sales. Stream Margin helps provide firms with an extra layer of credit protection by marrying industry margin rules with automated credit workflow and a firmâs own strategies.â
SunGardâs Stream Margin uses a core rules engine that gives firms the ability to establish separate initial, maintenance and house requirement rates for single stock futures instruments and their respective multi-component strategies, including long and short strategies approved by self-regulatory organizations (SROs). To help firms enhance strategy pairings for single stock futures positions, Stream Margin also performs initial requirement calculations and SMA (Special Memorandum Account) treatment. Stream Margin also provides the capability for single stock futures positions to be carried in portfolio margin accounts in which stock futures are stress tested using both maintenance and house requirement ranges.