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Same-Day Substitution

What is 'Same-Day Substitution'

An offsetting change in a margin account, made over the trading day, that results in no overall change in the value of the account. When a same-day substitution is made, a margin call is not generated.

Explaining 'Same-Day Substitution'

A same-day substitution happens when a rise in the market value of one margin security is offset by an equal decline in another.


Further Reading


Substitution between net and gross settlement systems: A concern for financial stability?
papers.ssrn.com [PDF]
… day. 1.2 Institutional Background … This suggests measuring the substitution between the two settlement systems based upon … Holding the price of liquidity constant, an increase in the price of default risk should cause the users of the net system to substitute into the gross system …

The effect of mandatory generic substitution on the safety of alendronate and patients' adherenceThe effect of mandatory generic substitution on the safety of alendronate and patients' adherence
www.tandfonline.com [PDF]
… day. 1.2 Institutional Background … This suggests measuring the substitution between the two settlement systems based upon … Holding the price of liquidity constant, an increase in the price of default risk should cause the users of the net system to substitute into the gross system …

HPTLC METHOD FOR QUANTIFICATION OF VALERENIC ACID IN AYURVEDIC DRUG HPTLC METHOD FOR QUANTIFICATION OF VALERENIC ACID IN AYURVEDIC DRUG
www.tandfonline.com [PDF]
… day. 1.2 Institutional Background … This suggests measuring the substitution between the two settlement systems based upon … Holding the price of liquidity constant, an increase in the price of default risk should cause the users of the net system to substitute into the gross system …

Substitution in sports: The case of lower division football attendanceSubstitution in sports: The case of lower division football attendance
journals.sagepub.com [PDF]
… day. 1.2 Institutional Background … This suggests measuring the substitution between the two settlement systems based upon … Holding the price of liquidity constant, an increase in the price of default risk should cause the users of the net system to substitute into the gross system …

Critical appraisal of the literature on economic evaluations of substitution of skills between professionals: a systematic literature reviewCritical appraisal of the literature on economic evaluations of substitution of skills between professionals: a systematic literature review
onlinelibrary.wiley.com [PDF]
… day. 1.2 Institutional Background … This suggests measuring the substitution between the two settlement systems based upon … Holding the price of liquidity constant, an increase in the price of default risk should cause the users of the net system to substitute into the gross system …

Anomalies: The law of one price in financial marketsAnomalies: The law of one price in financial markets
www.aeaweb.org [PDF]
… day. 1.2 Institutional Background … This suggests measuring the substitution between the two settlement systems based upon … Holding the price of liquidity constant, an increase in the price of default risk should cause the users of the net system to substitute into the gross system …

Financial liberalisation, stockmarkets and economic developmentFinancial liberalisation, stockmarkets and economic development
academic.oup.com [PDF]
… day. 1.2 Institutional Background … This suggests measuring the substitution between the two settlement systems based upon … Holding the price of liquidity constant, an increase in the price of default risk should cause the users of the net system to substitute into the gross system …

In defense of the finance constraintIn defense of the finance constraint
onlinelibrary.wiley.com [PDF]
… day. 1.2 Institutional Background … This suggests measuring the substitution between the two settlement systems based upon … Holding the price of liquidity constant, an increase in the price of default risk should cause the users of the net system to substitute into the gross system …

Dividends, taxes, and common stock prices: The ex-dividend day behavior of common stock prices before the income taxDividends, taxes, and common stock prices: The ex-dividend day behavior of common stock prices before the income tax
www.sciencedirect.com [PDF]
… day. 1.2 Institutional Background … This suggests measuring the substitution between the two settlement systems based upon … Holding the price of liquidity constant, an increase in the price of default risk should cause the users of the net system to substitute into the gross system …



Q&A About Same-Day Substitution


What happens when there is a same-day substitution?

When there is a same-day substitution, no margin call will be generated.

Are all securities eligible for substitutions?

No, only securities with similar risk profiles are eligible for substitutions. For example, stocks and bonds are not eligible for substitutions because they have different risk profiles.

Can you give an example of how to make a same-day substitution?

If one security increases by $100 and another decreases by $100 then there has been no overall change in the value of your account. The two changes cancel each other out.

What is a same day substitution?

A same-day substitution is an offsetting change in a margin account made over the trading day that results in no overall change in the value of the account.

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