Related Definitions

Initial Margin

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Initial Margin refers to the initial deposit which an investor pays to the broker at the time of opening a new futures position. Initial margin varies based on the underlying asset in the agreement. For some underlying asset, the initial margin is high and for some it is low. The calculation of the initial margin depends on a certain percentage of the total value of the assets covered and is usually quoted in the form of dollar amount by the futures broker.      

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