What is the term for the daily adjustment of profits or losses in futures trading? Option: Initial Margin, Contract Value, Mark to Market, Margin Call

<< Back

Hi

Show Ans

i

What is the term for the daily adjustment of profits or losses in futures trading?

Initial Margin

Contract Value

Mark to Market

Margin Call

<< Back

Hi

Show Ans

i

How is the Mark to Market (MTM) margin determined?

"By assessing the investor's overall portfolio value"

"By predicting future market trends using statistical models"

"By analyzing historical stock price volatility"

"By comparing the transaction price with the closing price"

<< Back

Hi

Show Ans

i

In the context of futures trading, what does the term 'margin' refer to?

The difference between the spot price and the futures price.

The total value of the futures contract.

The percentage of the contract value required as a deposit.

The profit or loss made on a futures trade.

<< Back

Hi

Show Ans

i

What is the primary function of margin in futures trading?

To ensure that both parties fulfill their obligations on contract expiry.

To predict the future price movements of the underlying asset.

To determine the daily settlement price of futures contracts.

To calculate the potential profit or loss of a futures contract.

<< Back

Hi

Show Ans

i

What is the primary function of 'margin' in futures trading?

It acts as a performance bond ensuring parties fulfill their contractual obligations

It represents the initial investment required to enter a futures contract

It is a fee charged by brokers for facilitating futures transactions

It serves as collateral to cover potential losses exceeding the margin amount

<< Back

Hi

Show Ans

i

What is Margin in stock trading?

"Commission charged by the broker"

"Amount collected by the exchange as assurance of the trade"

"Profit earned from selling stocks"

"Difference between the ask and bid price"