Notice to Members
Notice No. 37
01/30/2001
Palladium Margins Rate Change for February 2, 9, and 16, 2001
MARGIN RATE CHANGE FOR FEBRUARY 2, 2001

Effective Date: Friday, February 2, 2001 (close of business)
Futures Contract: Palladium
Contract Month: Friday, and March 2001 Contract Only

NYMEX Division Margins on Palladium Futures Contracts
Effective at Close of Business
Friday, February 2, 2001		 Old New
Clearing Member (Maintenance Margin)
$15,000
$30,000
Member Customer (Initial Margin)
$16,500
$33,000
Non-Member Customer (Initial Margin)
$20,250
$40,500


MARGIN RATE CHANGE FOR FEBRUARY 9, 2001
Effective Date: Friday, February 9, 2001 (close of business)
Futures Contract: Palladium
Contract Month: February and March 2001 Contract Only


NYMEX Division Margins on Palladium Futures Contracts
Effective at Close of Business
Friday, February 2, 2001
Old
New
Clearing Member (Maintenance Margin)
$30,000
 $40,000
Member Customer (Initial Margin)
$33,000
$44,000
Non-Member Customer (Initial Margin)
$40,500
 $54,000

MARGIN RATE CHANGE FOR FEBRUARY 16, 2001
   
Effective Date: Friday, February 16, 2001 (close of business)
Futures Contract: Palladium
Contract Months:
February and March 2001 Contracts Only


NYMEX Division Margins on Palladium Futures Contracts
Effective at Close of Business
Friday, February 2, 2001
Old
New
Clearing Member (Maintenance Margin)
$40,000
 $50,000
Member Customer (Initial Margin)
$44,000
$55,000
Non-Member Customer (Initial Margin)
$54,000
 $67,500


Spread Margins

Current systems calculate the margin requirement for spread positions by first determining the "Scan Risk" and then multiplying the number of spreads by a rate set by the Exchange. Scan Risk is determined by netting the outright margin required for each leg of a spread. Note the outright margin level required for the February and March 2001 contracts, and all subsequent contracts, are different. Spreading between differently margined contracts results in a higher spread margin than between equally margined contracts. Below are margin examples of certain spreads where the legs of the spread are margined differently.

Example of Clearing Member Rates for February 2, 2001 Margin Change

       
One Long March Palladium
(1 x $30,00)
=
$30,000
One Short April Palladium
(1 x $15,000)
=
- $15,000
Net Scan Risk
($30,000 - $15,000)
=
$15,000
Spread Rate
(1 x $250)
=
+ $250
Total Requirement
=
$15,250

NYMEX Division Margins on Palladium Futures Spreads -
Requirements for Spreads with One Leg in Designated Months
February and March
Other Months
Clearing Member (Maintenance Margin)
$15,250
$250
Member Customer (Initial Margin)
$16,775
$275
Non-Member Customer (Initial Margin)
$20,588
$338


Example of Clearing Member Rates for February 9, 2001 Margin Change

       
One Long March Palladium
(1 x $40,00)
=
$40,000
One Short April Palladium
(1 x $15,000)
=
- $15,000
Net Scan Risk
($40,000 - $15,000)
=
$25,000
Spread Rate
(1 x $250)
=
+ $250
Total Requirement
=
$25,250


NYMEX Division Margins on Palladium Futures Spreads -
Requirements for Spreads with One Lef in Designated Months
February and March
Other Months
Clearing Member (Maintenance Margin)
$25,250
$250
Member Customer (Initial Margin)
$27,775
$275
Non-Member Customer (Initial Margin)
$34,088
$338


Example of Clearing Member Rates for February 16, 2001 Margin Change

       
One Long March Palladium
(1 x $50,00)
=
$50,000
One Short April Palladium
(1 x $15,000)
=
- $15,000
Net Scan Risk
($50,000 - $15,000)
=
$35,000
Spread Rate
(1 x $250)
=
+ $250
Total Requirement
=
$35,250

NYMEX Division Margins on Palladium Futures Spreads -
Requirements for Spreads with One Leg in Designated Months
February and March
Other Months
Clearing Member (Maintenance Margin)
$35,250
$250
Member Customer (Initial Margin)
$38,775
$275
Non-Member Customer (Initial Margin)
$47,588
$338
Should you have any questions or require any further information, please contact exchangeinfo@nymex.com