The required initial margin of a futures trading account can be viewed as
A) A down payment on the contract
B) A commission to the broker
C) A maintenance fee
D) A performance guarantee
E) None of the above

Question

Quizplus · Accepted Answer

The required initial margin of a futures trading account is a performance guarantee, meaning it is a deposit made to ensure that the trader will fulfill their contractual obligations. It is not a down payment, commission, or maintenance fee, although these may also apply to futures trading accounts.

The Required Initial Margin of a Futures Trading Account Can