Iran strikes a stress test for CCP margin models
CME’s Span2 and Ice’s IRM2 are performing as advertised. The next few days could test their mettle
New margin models introduced by clearing houses in recent years have so far weathered the volatility in energy markets caused by the Iran conflict, though clearing firms warn of more disruptive margin hikes if the conflict lasts more than a few weeks.
Oil prices saw intraday moves of more than 6% on Monday and Tuesday, prompting CME to review the parameters of its Span 2 margin model, which was rolled out for energy contracts in late 2023.
The Chicago exchange subsequently raised initial margin
More on Risk management
Energy Risk Debates: risk management in the clean energy space
Panellists discuss the unique issues facing firms in renewables, clean energy and carbon markets
Energy Risk 2026 Software Rankings: CTRM landscape needs to support resilience
Commodity firms’ software choices across the CTRM landscape are crucial amid current uncertainty
EU can handle energy price pressure – it’s been here before
Reforms made after Russia’s invasion of Ukraine have made region more resilient to energy shocks, officials say
A Hormuz tipping point may be days away
Agent-based model suggests delays and shortages likely to accelerate after four weeks
ENGIE’s Daronnat: pricing flexibility in the German battery market
Head of flexibility and structured origination in Germany discusses the role of FPAs and what risk teams must consider
Next-gen PPA contracts reshaping European power markets
As energy market participants seek new ways of capturing value from volatility, new skills are required to structure and price increasingly complex power purchase agreements
Energy Risk reaction: Impact of Middle East conflict on hedging and longer term risk
Energy Risk talks to Riccardo Rossi at Centrica Energy and Rob McLeod at Hartree Partners about the impact of the Iran crisis so far on firms exposed to energy
Energy Risk Debates: the role of the risk manager
Panellists discuss the different roles of the risk manager, how much standardisation there is across firms and whether the role is ever clear
