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Does the amount which we deposit in the account for futures transactions have any effect in the calculations of futures profit/losses? I’ve seen your lectures and you have explained why deposits are needed but I don’t know what effect it would have on calculations. Additionally, can you clarify whether I am correct or wrong in the following: The amount of loss which I get on a futures transaction will be first deducted from my deposit account and then the remaining I have to pay from my own pocket?
The deposit (or margin) is repaid at the end of the futures deal plus any profit or less any loss.
The margin is substantial and the amount required changes from day to day as futures prices go up and down, and will therefore always be enough to cover any eventual loss on the futures. Therefore there will always be a repayment of the margin, but any loss on the futures will be subtracted from the repayment.
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