Review
Futures margin requirements depend on the exchange, the underlying assets, whether the investor is initiating a new position or maintaining a current one, whether the investor is a hedger or a speculator, and whether the position is standalone or the leg or a spread.

It is important to understand how options are valued and quoted in order to effectively trade futures contracts, particularly those related to interest rates or indices.

Price limits and other so-called circuit-breakers have an impact on prices and margin requirements.

A position can be closed through liquidation, delivery or cash settlement.

There is a specified process for closing positions that involves assignment and exercise dates, concepts from the options world.

Quiz

  1. Which is a factor of margin requirement?
    1. Whether the position is speculative or a hedge
    2. Whether a hedger is initiating a position or maintaining one
    3. European- or American-style terms
    4. Time to expiration


  1. A 9-month T-bill has a 6.08% yield with 90 days to maturity. A futures contract for it is trading at $985,100. Which is false?
    1. The bill's intrinsic value is $984,800.
    2. Its IMM index is 93.82.
    3. The time value on its futures contract is $300.
    4. It trades in points and 32nds.


  1. Once a futures contract has risen to its price limit, it may not rise any higher through the expiration date.

True

False

  1. Which is not a way to close a futures position?
    1. Offset
    2. Retender
    3. Cash settlement
    4. Physical delivery


  1. Matching investors in long positions with investors in short positions in advance of physical delivery is called:
    1. pooling
    2. spreading
    3. assignment
    4. expiration


Answers

Related Articles
  1. Investing

    Trading Gold and Silver Futures Contracts

    If you are a hedger or a speculator, gold and silver futures contracts offer a world of profit-making opportunities.
  2. Investing

    Investing in Crude Oil Futures: The Risks and Rewards

    Learn about the risks and rewards of trading oil futures contracts. Read about a few strategies to limit the risk in trading oil futures contracts.
  3. Investing

    Investing Basics Quiz 1

    Test your knowledge with our short investing quiz.
  4. Trading

    American Vs. European Options

    These two options have many similar characteristics, but it's the differences that are important.
  5. Trading

    Short Selling Quiz 1

    Test your knowledge with our short selling quiz.
  6. Trading

    The Difference Between Forwards and Futures

    Both forward and futures contracts allow investors to buy or sell an asset at a specific time and price.
  7. Investing

    3 Reasons to Use ETF Options Over Futures (SPY, QQQ)

    Learn about exchange-traded fund (ETF) options and index futures, and why it might be a better decision to use ETF options instead of futures.
Frequently Asked Questions
  1. How do you calculate r-squared in Excel?

    Calculate R-squared in Microsoft Excel by creating two data ranges to correlate. Use the Correlation formula to correlate ...
  2. What is the Difference Between International Monetary Fund and the World Bank?

    Learn about the International Monetary Fund and the World Bank and how they are differentiated by their respective functions ...
  3. Where Did the Bull and Bear Market Get Their Names?

    The terms bull and bear are used to describe general actions and attitudes, or sentiment, either of an individual (bear and ...
  4. What's the difference between Google's GOOG and GOOGL stock tickers?

    Learn the difference between Google's GOOG and GOOGL ticker symbols. Splitting shares into classes prevents management from ...
Trading Center