In the futures markets,the funds that represent 2 to 10 per cent of the futures contract that a client pays to the futures exchange clearing house are called:
A) maintenance margin.
B) initial collateral.
C) margin call.
D) initial margin.

Question

Quizplus · Accepted Answer

The funds that represent 2 to 10 per cent of the futures contract that a client pays to the futures exchange clearing house are called initial margin. This initial margin is intended to provide a buffer against potential losses and is typically based on the volatility and liquidity of the underlying commodity or financial instrument being traded.

In the Futures Markets,the Funds That Represent 2 to 10