For the settlement of futures contracts, the clearing corporation requires that a margin be placed with the corporation by
A) the short position only.
B) the long position only.
C) the short and the long in all contracts.
D) the short and the long only in extraordinary circumstances.

Question

Quizplus · Accepted Answer

The clearing corporation requires both the short and the long position to place margin with the corporation in all contracts. This is to ensure that both parties have sufficient funds to cover any losses or obligations that may arise from the futures contract. Margin serves as a form of collateral and is typically a percentage of the total value of the contract. It is adjusted based on market fluctuations to ensure that the margin account remains adequately funded.

For the Settlement of Futures Contracts, the Clearing Corporation Requires