Some brokers may allow the client to earn interest on the margin account balance. If the interest rate
is competitive with the interest rates that could be obtained elsewhere, the margin account balance is not
the true price of the futures contracts.
Some brokers may also accept securities as cash equivalents for margin accounts. However, they will
not be accepted at their face value but rather at a value less than the face value so as to take into account
the possible value erosion over time due to price changes in these securities. e CMs who need to post
margins to the clearinghouse can post margins using securities that are specied by the clearinghouse as
substitutes for cash.
e process of marking-to-market implies ...
Become an O’Reilly member and get unlimited access to this title plus top books and audiobooks from O’Reilly and nearly 200 top publishers, thousands of courses curated by job role, 150+ live events each month, and much more.