Question
With respect to the futures transactions, the purpose
of margin is to ________Solution
Futures contract is an exchange-traded contract to buy or sell an underlying asset at a future date at an agreed price . A margin account has to be opened by both parties of the futures contract, when opening a futures contract where a margin i.e. an amount of money is to be deposited with the clearing house by both the parties. This margin is like a security to the clearinghouse and it serves to ensure traders will fulfil their obligations.
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