§ 01
| Concept | Definition | Example |
|---|---|---|
| Initial Margin | Deposit required to open a position | $10,000 to control $100,000 of oil |
| Maintenance Margin | Minimum account balance to keep position | If equity drops below this, margin call |
| Mark-to-Market | Daily P&L settlement in cash | Gain $500 today → $500 credited to account |
| Basis | Spot price − Futures price | Converges to zero at expiration |
§ 02
Leverage = Contract Value / Margin Deposit
§ 03
At 10x leverage, a 5% adverse move wipes out 50% of your margin. A 10% move wipes you out entirely. This is why futures margin calls happen quickly and why risk management is non-negotiable.
§ 04
Calculate the leverage for an S&P 500 E-mini future: ~$200,000 notional with ~$12,000 margin. What percentage move would trigger a margin call?
§ 05
You buy one crude oil future ($70,000 notional) with $7,000 margin. Oil drops 8%. What happens?
§ 06
§ 07
You're long 10 E-mini S&P futures at $4,500 index. Initial margin: $15K/contract. Overnight the S&P moves +0.5%. What's your marked-to-market P&L?
Five questions · AI feedback
Sit with the ideas.
You hold a long crude oil futures position worth $100,000 notional with $10,000 in initial margin. Oil drops 8% in one day. What happens?
Why: