What has happened to cause a $250 loss to be marked to the margin account of a futures contract buyer?
A) The commodity decreased in value on that day.
B) The commodity increased in value on that day.
C) The commodity decreased in value by $250 over the contract's life.
D)The commodity increased in value by $250 over the contract's life.

Question

Quizplus · Accepted Answer

A loss of $250 in a futures contract buyer's account would occur if the commodity that the contract is based on decreased in value on that day. Margin accounts are used to cover losses and if the account falls below a certain threshold, the broker may issue a margin call to ensure that the trader has enough funds to cover potential losses.

What Has Happened to Cause a $250 Loss to Be