What do Value at Risk (VAR), Extreme Loss Margin (ELM), and Adhoc margins refer to?

VAR is a statistical measure of the maximum potential loss within a specified confidence level over a given time horizon. It quantifies the level of financial risk within a portfolio or trading position. 

ELM is an additional margin charged by exchanges to cover the risk of extreme price movements or “fat tail” events that may not be adequately captured by VAR or other risk measures. 

Adhoc margins are additional margins imposed by exchanges or regulatory authorities in response to specific market conditions or events that pose heightened risks.

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