The following is a short extract from the course "How To Trade The Futures Market", please click here Trade Futures Course for full details on how to obtain the full text, futures trading simulator along with sample data and bonus trading ebooks package.

Find: Account ftse futures expiration index position contracts deliver positions first.

Lets say an investor buys 2 FTSE 100 Index futures contracts for a price of 5300. His initial margin requirement is 2 x 5000 = 10,000, which is the minimum he must have in his account to open this position. Let us assume that he has in his account exactly 10,000 when he buys the 2 contracts. At the end of the first day the price of the FTSE 100 Index futures has dropped to 5100, a fall of 200 points. The point value for the FTSE is 10, so our trader has a loss at the end of the first day of 2 x 10 x 200 = 4000. This will be reflected in his account, which will be reduced to 6000. As this is below the maintenance margin requirement of 7000, he will need to deposit 4000 into his account to maintain his position. 20 Delivery The majority of market participants close out their positions before the contract expiration date. Unless you are participating in the market as a hedging vehicle and you want to receive or deliver the underlying asset, it is very important to close out your position before expiration. Having said that, for some financial futures contracts any positions still open at expiration are settled in cash. It would be impossible to deliver, for example, the FTSE 100 index at the precise value specified, so such markets are settled in cash on expiry.

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How To Trade The Futures Market

For full details about this detailed course, which includes a futures trading simulator software package complete with some sample trading data, and free trading ebook package please click here Futures Trading Course

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