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The Threshold is the level of unsecured exposure each party will allow the other before any call for collateral is made. This is generally given as a fixed amount and can range from zero to X million.
Initial margin or Independent Amount as it is called in the CSA is a confusing term and can mean the amount that the parties may need to transfer at the start of their relationship or an agreed sum to be transferred later if the risk exposure on a particular transaction warrants it or the risk profile of a
ISDA Master Agreement A master agreement is required to trade derivatives, although the CSA is not a mandatory part of the overall document. Since 1992, the master agreement has been used to define the terms of a derivatives trade and make them binding and enforceable.
The Credit Support Amount is the Secured Party's Exposure plus Pledgor's Independent Amounts minus Secured Party's Independent Amounts minus the Pledgor's Threshold.
The Threshold is the level of unsecured exposure each party will allow the other before any call for collateral is made. This is generally given as a fixed amount and can range from zero to X million.