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Assume that on a recent day, the September 2019 S&P Index futures contract (i.e., the S&P...

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Finance

Assume that on a recent day, the September 2019 S&P Indexfutures contract (i.e., the S&P contract which expires inSeptember) closed at 2890, up 7 points on the day. The value of thecontract is set at 250 × the index.

When you bought the contract, you had to put up initial marginof $35,000. The maintenance margin is $31,000. At what contractprice will you get a margin call?
Explain.

Answer & Explanation Solved by verified expert
4.4 Ratings (948 Votes)
Initial margin is the margin that is required to open a trade in the market The maintenance margin on the other hand is the number on breach of which the investor will have to provide money to    See Answer
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