What Is a Payment Bond?

Settlement margin is also called "letter of credit guarantee", referred to as "margin", and is settled in advance by the bank by means of payment by letter of credit. The bank accordingly issued a letter of credit power of attorney to notify the selling unit to ship. This settlement method of depositing deposits in advance is generated when the buyers and sellers have not established settlement credibility and do not trust each other, which can ensure that the receiving unit receives the payment in time and prevents the paying unit from defaulting. Because the deposited deposit does not include interest, it increases the company's occupation of funds, which is not conducive to the full use and turnover of funds. Banks can set up a "settlement margin" account to account for the settlement and understanding of corporate funds using a letter of credit settlement method. ^[1]

Settlement margin

Settlement margin is also called "letter of credit guarantee", referred to as "margin", and is settled in advance by the bank by means of payment by letter of credit. The bank accordingly issued a letter of credit power of attorney to notify the selling unit to ship. This settlement method of depositing deposits in advance is generated when the buyers and sellers have not established settlement credibility and do not trust each other, which can ensure that the receiving unit receives the payment in time and prevents the paying unit from defaulting. Because the deposited deposit does not include interest, it increases the company's occupation of funds, which is not conducive to the full use and turnover of funds. Banks can set up a "settlement margin" account to account for the settlement and understanding of corporate funds using a letter of credit settlement method. ^[1]

use

Settlement margin can be divided into two types: original margin, initial margin and variation margin.

1. Original margin refers to the original deposit that must be paid to own the newly added position.

2. The change margin refers to the amount that must be adjusted every day due to the change in the settlement price (settlement Price).