Future
Contract Margin
A minimum amount is required to pay for setting a
future contract. This amount is paid to cover the possible loss from the
future.
Types
of Future Margin
Future margin can be categorized into two type’s i.e.
initial margin and variation margin
1. Initial Margin
Initial margin is paid at
the time of setting the contract to cover the possible losses from the future
contract.
2. Variation Margin
Variation
margin is paid in case of adverse situation, this margin is required, when the
initial margin has forfeited or not sufficient to cover the losses.
