Page 131 - PRIAA Glossary

PORTFOLIO MARGINING
The method of maintaining a margin balance in which holdings across the portfolio are netted to determine the required margin. In this way, a position that is positive can offset a losing position.
PORTFOLIO RECONCILIATION
A process of mutual trade comparison which occurs in the event of a collateral dispute over the mark-to-market value of a collateralised portfolio. The process highlights any difference in the number and/or the mark-to-market value of trades that then need to be investigated and resolved.
PORTFOLIO SWAP
A total return swap that is covered under a portfolio swap agreement between two parties. This arrangement enables high-volume trading without requiring the legal execution of individual over-the-counter (OTC) trade confirmations, as opposed to trading discrete total return swaps which do require the execution of individual legal confirmations.
POSITION
To own or owe a security or other asset. A long position is when one owns something, whilst a short position is when something is sold. Positions consist of security ID and quantity.
POSTPONEMENT
A term defined in the 2011 ISDA Equity Derivative Definitions to describe one method of adjusting averaging dates, should an averaging date be subject to a market disruption event.
If elected, a disrupted averaging date is rolled forward to the next good business day, regardless of whether such date is also an averaging date, subject to a cap of eight good business days. Under this provision, the same date can be used for multiple observations.
POTENTIAL FUTURE EXPOSURE (PFE)
A measurement of counterparty credit exposure calculating the maximum amount of exposure occurring at a future point in time with a high degree of statistical confidence.
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