Risk Management
Explore the products and services in place to identify, analyze, and limit losses.
Mitigate credit risk
Clearing trades reduces risk. CME Clearing serves as counterparty to every trade, sharing credit risk among clearing members to virtually eliminate it.
Enhance efficiency
Real-time trade confirmations and straight-through processing help accelerate the trade lifecycle and minimize errors.
Know your costs
Margins are calculated upfront, with positions marked to market daily. Clearing also helps reduce potential for uncleared regulatory charges.
Explore how we help mitigate credit risk by having CME Clearing act as the central clearing counterparty to every trade – with safeguards and protocols built into every step of the trading lifecycle.
Resources
How we manage risk
Get information on the different tools and resources to help optimize risk management.
Customer and Market Protections
Risk management and financial surveillance are principal functions of CME Clearing's financial safeguards and customer protections system. Find out more with these resources.
The methodology behind margins: SPAN and SPAN 2
The CME Standard Portfolio Analysis of Risk (SPAN) methodology has been an industry standard for margining for decades and is still in use today. To address increasing demands on margin methodology, CME Group has developed and begun implementing SPAN 2, which preserves the risk appetite and key forecasting capabilities of SPAN while incorporating new capabilities.
SPAN
Evaluates overall portfolio risk using a Value at Risk (HVar) framework, by:
- Calculating the worst possible loss a portfolio may reasonably incur over a specific time period (usu. one trading day)
- Computing gains/losses the portfolio would incur under different market conditions
SPAN 2
Also uses an HVaR framework to evaluate risk, while allowing for:
- Granular and dynamic adjustments to margins at a product and portfolio level
- Enhanced reporting of margining into different risk factors, such as market risk, liquidity and concentration risk
Clearing
CME Clearing serves as the neutral counterparty to every futures, option, and OTC trade, ensuring market integrity and reducing risk. Learn about the integral role we play in the global marketplace.
Market Technology
Explore our comprehensive portfolio of trading applications, infrastructure, global connectivity, and data services needed throughout the trading lifecycle.
Margin Services
Get insight on the institution-grade tools we use to reduce bilateral counterparty credit risk and free up trading capital, optimizing margin efficiency.
Contact an expert
Connect with a team member to learn more about the risk management services described here.
Phone
+1 312 648 3888
clearing.riskmanagement@cmegroup.com
