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Kss612 Kss612
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A month ago
All futures contracts are traded on a margin basis. What does "margin" mean, and how does the use of margin affect the inherent risk-return nature of the futures market?
Textbook 

Fundamentals of Investing


Edition: 14th
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thevoicexxxthevoicexxx
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Margin refers to the amount of equity that goes into a purchase. The use of margin in the futures market means that there is a great deal of leverage involved, and therefore a great deal of risk. Consequently, the pay-offs can be tremendous, but so can the losses.

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