What is a relatively small (in terms of the contract value)deposit made with the clearinghouse?
A) Maintenance margin
B) Margin call
C) Initial margin
D) Daily resettlement

Question

Quizplus · Accepted Answer

Initial margin is a relatively small deposit made with the clearinghouse when a futures contract is initiated. It is designed to ensure that the trader has sufficient funds to cover any potential losses they may incur during the duration of the contract. Maintenance margin is the minimum amount that must be maintained in the trading account to keep the contract open, while a margin call is a demand for additional funds if the account falls below the maintenance margin. Daily resettlement is the process of settling gains and losses on a daily basis.

What Is a Relatively Small (In Terms of the Contract