In futures contracts, initial margin requirements are set by the exchange. Maintenance margin requirement A sum, usually smaller than -but part of the original margin, which must be maintained on deposit at all times. If a customer's equity in any futures position drops to, or under, ...
Performance bonds protect both the trader and the integrity of the industry because trading losses are not allowed to accumulate from day to day. If performance bonds were not monitored on a daily basis (and sometimes, in very volatile markets, intra-day), losses could easily mount, putting th...
Interest Charges and Loan Repayment.The borrowed funds in a margin account incur interest charges, which the investor is obligated to repay. When securities are sold, the proceeds first go toward repaying the loan, and the remaining amount is retained by the investor. Regulation by FINRA and ...
Margin trades are usually made by investors who are certain that the market will move in one or the other direction in the near future. You’re basically accepting the added risk of betting loaned money because you feel that the odds are that your bet will pay out. So, for example, you...
On expiration day, the future is trading at $505. The least likely way the futures trader will lock in her profits on expiration is: ( ) A.Take delivery of the underlying asset and pay $500 to the short. B.Close out the futures position by selling the futures contract at $505. C...
Related to Margin: profit margin, margin call, Margin trading Margin Allows investors to buy securities by borrowing money from a broker. The margin is the difference between the market value of a stock and the loan a broker makes. Related: Security deposit (initial). In the context of hedgi...
In commercial transactions the difference between the purchase price paid by an intermediary or retailer and the selling price, or difference between price received by manufacturer for its goods and costs to produce. Also called gross profit margin. ...
Often, interest paid on amargin accountat a brokerage firm will be classed as investment interest, but that's not the only possible source. Deducting interest paid Most standard brokerage agreements allow the broker to lend out stock held in amargin account. In the past, investors were generall...
When an investor sells the stock in a margin account, the proceeds go to the broker against the repayment of the loan until it is fully paid. There is also a maintenance margin, the minimum [[account balance]] the investor must maintain before the broker will force him or her to deposit...
Cash Margin paid to us is held as client money in accordance with the requirements of the Client Money Rules. More Definitions of Cash Margin Cash Margin means, with respect to the U.S. Treasury Futures held by a PPF, on any Valuation Date, the Market Value of the Cash Equivalents held...