Principles of Corporate Finance

(Barry) #1

Margin


w The amount (percentage) of a Futures
Contract Value that must be on deposit with a
broker.


w Since a Futures Contract is not an actual sale,
you need only pay a fraction of the asset
value to open a position = margin.


w CME margin requirements are 15%


w Thus, you can control $100,000 of assets with
only $15,000.

Free download pdf