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What is the initial margin on a futures contract

What is the initial margin on a futures contract

Initial Margin – set by the respective exchange and represent the amount required to hold a position into the next trading session. Maintenance Margin – the lowest  Initial margin will specify the amount of funds that will be required to be available in your futures account to purchase one futures contract. Intraday margin  1 Includes $0.10 per futures contract routing fee for use of Continuum (default). Product. Group. Product. Code. Product. Initial. Margin. Maintenance. Margin  Discount Trading - Day Trading & End Of Day Futures Margin Requirements. Initial & Maintenance Margin vs. Day Trade (Intra-Day) Margin. Initial Margin and   In order to buy 1 contract of crude oil, a minimum initial margin is required ( currently $6334). If you bought 1 crude contract and it moved in your favor $0.10, you  Initial margin is the equity required to initiate a futures position. This is a type of performance bond. The maximum exposure is  If the initial deposit is held as a Treasury bill, then any erosion in equity must be restored. Also, if the initial margin for a hedger equals the maintenance level for a  

Understanding the mechanics of margin for futures. Initial and maintenance margin. I don't really understand what the benefit of the margin account is for the buyer when the futures contract delivery price goes down. Without the margins 

Futures margin requirements are set by the exchanges and are typically only 2 to 10 percent of the full value of the futures contract. Margins are financial guarantees required of both buyers and sellers of futures contracts to ensure that they fulfill their futures contract obligations. What is futures margin, and what is a margin call? Much like margin in trading stocks, futures margin—also known unofficially as a performance bond—allows you to pay less than the full notional value of a trade, offering more efficient use of capital. Futures margin is simply leverage that can enhance returns; however, it can also exacerbate losses, which is why it's important to use proper risk management.

The basic pie — initial margin — in the futures market is one of the most important parts. The profit and loss arising from your “position” and market price 

With the general concept of margin in mind, futures trading margins consists of three margin types: Intraday Margin; Initial Margin; Maintenance Margin; This article will focus on Intraday Margin while Initial & Maintenance Margins (commonly referred to as Exchange Margins) is covered in a subsequent post. At a high level, Intraday Margin is the minimum account balance required to enter one contract during trading hours. Initial & Maintenance represent the other half of the margins equation.

If the initial deposit is held as a Treasury bill, then any erosion in equity must be restored. Also, if the initial margin for a hedger equals the maintenance level for a  

If you want to purchase 1,000 shares of a stock valued at $10 per share, for example, the total price would be $10,000. However, a margin account with a brokerage firm would allow you to acquire the $1,000 shares for as little as $5,000, with the brokerage firm covering the remaining $5,000. Futures margin requirements are set by the exchanges and are typically only 2 to 10 percent of the full value of the futures contract. Margins are financial guarantees required of both buyers and sellers of futures contracts to ensure that they fulfill their futures contract obligations. What is futures margin, and what is a margin call? Much like margin in trading stocks, futures margin—also known unofficially as a performance bond—allows you to pay less than the full notional value of a trade, offering more efficient use of capital. Futures margin is simply leverage that can enhance returns; however, it can also exacerbate losses, which is why it's important to use proper risk management.

Assume, for example, that the initial margin needed to buy or sell a particular futures contract is $2,000 and that the 

margins on stock index futures contracts in order to use a hypothetical futures contract on a stock 'Currently initial margin requirements are 50 percent. The.

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