Futures margin is defined as the deposit of funds into a futures trading account for which one of the following purposes?
A)purchase additional futures contracts
B)take a hedge position in the future
C)cover potential losses from outstanding positions
D)cover the trading costs and commissions
E)cover the future costs of reversing the position

Question

Quizplus · Accepted Answer

Futures margin is the amount of money that a trader must deposit into a futures trading account to cover potential losses from outstanding positions. This ensures that the trader has enough funds to cover any losses they may incur if the market moves against them. The margin also acts as a performance bond, ensuring that traders fulfill their obligations to the exchange.

Futures Margin Is Defined as the Deposit of Funds into a Futures