What are eroding margins?Eroding margins are margins that decrease in value over time. Many products have eroding margins because the margins are based on the average price for the month and thereby, they present less risk than regular margins. Currently, eroding margins are calculated with the formula: price scan *(calendar days remaining/total calendar days in the month) so as the month goes on, the eroding margin decreases in value. The following table provides an example of linear erosion:
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