Futures Spread Margin

If you’re new to futures, then you may find yourself asking: What is margin trading? In short, margin trading is the act of securing the rights to an asset via third-party financing. However, its functions and applications in the futures markets go much deeper than simply taking out a loan.

For many futures traders, the word margin carries a rather negative connotation. Flashbacks of short-notice bank wires or premature exits from winning trades often haunt practitioners of haphazard risk management. To some, it’s a nasty six-letter word, and margin call is the kiss of death. Of course, the truth of futures margins is much less… Read more.