Investments, tenth edition

 Example  22.1 

Maintenance Margin 

 margin calls safeguard the position of the clearinghouse. Positions are closed out before 

the margin account is exhausted—the trader’s losses are covered, and the clearinghouse is 

not put at risk. 

 

  

2

 Small differences between the spot and futures price at maturity may persist because of transportation costs, but 

this is a minor factor. 

 Assume the current futures price for silver for delivery 5 days from today is $30.10 per 

ounce. Suppose that over the next 5 days, the futures price evolves as follows:   

 Example  22.2 

Marking to Market 

Day

Futures Price

0 (today)

$30.10

1

30.20

2

30.25

3

30.18

4

30.18

5 (delivery)

30.21

bod61671_ch22_770-798.indd   779

bod61671_ch22_770-798.indd   779

7/27/13   1:48 AM

7/27/13   1:48 AM

Final PDF to printer

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P A R T   V I

  Options, Futures, and Other Derivatives