What Are Futures & How Does Futures Trading Work?
If the initial margin is 10% of the contract’s value, the trader deposits only $25,000 (10% of $250,000) to enter the futures contract. If the index falls by 10% to 4,500 points, the value of the futures contract decreases to $225,000 (4,500 points × $50). Traders face a loss of $25,000, which equals a 100% […]
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