Eurex Clearing’s goal is to reduce the impact of market movements to the lowest possible degreeduring the default management process (DMP). Therefore the portfolio inherited from the defaulting Clearing Member will be analysed and accordingly hedged. The initial margin serves as macro guide and guiding measure when determining a hedging strategy. Efficient hedging will reduce risk in terms of initial margin, mitigate concentrations and stabilize the portfolio during the Default Management Process with a view towards shaping the liquidation group for the auction. Hedging can and will be executed on different aggregation levels. Hereby Eurex Clearing generally differs between macro hedges and micro hedges. Macro hedges will be executed on the highest aggregation levels, utilizing highly liquid benchmark instruments which have been predetermined per liquidation group. On a lower aggregation level risk concentrations may be micro hedged down to individual positions. Hedging instruments are part of a liquidation group to be hedged and are traded, cleared and auctioned together with the original portfolio.