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margins on futures

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › margins on futures

  • This topic has 1 reply, 2 voices, and was last updated 9 years ago by AvatarJohn Moffat.
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  • March 7, 2017 at 9:15 pm #376405
    Avataramna
    Participant
    • Topics: 92
    • Replies: 93
    • ☆☆

    can you briefly explain the following?

    what is :

    an intial margin?

    maintenance margin?

    margin call?

    variation margin?

    March 8, 2017 at 6:12 am #376459
    AvatarJohn Moffat
    Keymaster
    • Topics: 57
    • Replies: 54845
    • ☆☆☆☆☆

    As is explained in my free lectures, the margin is the deposit required at the beginning of a futures deal (which is returned at the end of the deal plus and gain or less any loss).

    As the price of the futures goes up and down the amount of the margin required will go up and down (the maintenance or variation). If the dealer requires the deposit to be increased then they make a margin call asking for more deposit.

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  • The topic ‘margins on futures’ is closed to new replies.

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