Chapter 6 Crunch time Flashcards
margin
1
Q
margin is set at the same percentage for both long and short positions. who establishes margin?
A
the exchange
2
Q
Hedging margin is usually _________ than speculation margin
A
lower
3
Q
How often are margin requirements calculated and what are they based on?
A
daily, contract’s settlement value
4
Q
_____________ is not always considered the last trade
A
settlement value
5
Q
If equity falls below the maintenance level, the client is required to do what?
A
bring the equity back to the original margin
6
Q
How much can clients withdraw?
A
only the portion of equity that is greater than the initial margin
7
Q
excess equity that is used to meet margin on new positions
A
pyramiding
8
Q
What happens to contracts if the exchange changes margin requirements?
A
it then applies to all contracts
