I would appreciate an explanation for the following problem:
Trader A is long a futures position worth $10 and Trader B is the short counterparty. Since it is exchange-traded the contract is cleared through a clearing house.
Suppose the value of the contract drops to $8 so Trader A is expected to make a Variation Margin payment at the end of day of $2 to the benefit of Trader B. However, Trader A closes out his position by going short the same contract before the end of the day. My question is, is trader A still liable for a VM payment? If not, who will pay trader B the VM amount? The new counterparty of Trader B (say Trader C) bought the contract at $8 so he would not be liable for a VM.