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Trading Commodities, Commodity Options and Currencies (Collection)
book

Trading Commodities, Commodity Options and Currencies (Collection)

by Paul Brittain Carley Garner
May 2012
Beginner
793 pages
20h 29m
English
Pearson
Content preview from Trading Commodities, Commodity Options and Currencies (Collection)

Chapter 10. Coping with Margin Calls

Thanks to movies and other media outlets, many beginning traders have become overly frightened by the idea of a margin call. Truth be told, if you trade responsibly you shouldn’t receive many, but it can and will eventually happen.

What Is Margin?

Margin is simply a specified amount of funds stipulated by the exchange and required to be held in a brokerage account to hold positions in a futures market. In its simplest form, it is a good-faith deposit or financial collateral used to cover credit risk. By demanding minimum margin required to trade in any given contract, the exchange is mitigating the possibility of traders defaulting on their trading or losing more money than they have on deposit and not meeting ...

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Publisher Resources

ISBN: 9780133091335