Question

An investor takes a long position in 3 futures contracts. The initial margin is $8,200 per contract and the maintenance margin is $6,000 per contract. At 1 p.m. today, the investor's total margin account balance is $15,490.64 and the investor receives a margin call. How much must the investor deposit into the margin account at 1 p.m. to keep the futures position open

Answer 1

$3,036.45

Step-by-step explanation:

Total Initial margin = Initial margin per contract * Number of contracts = $8,200 * 3 = $24,600

Total maintenance margin = maintenance per contract * Number of contracts = $6,000 * 3 = $18,000

Total margin account balance = $15,490.64

We observe Margin account balance < Maintenance margin

Margin call required = Initial margin - Total account balance

Deposit Amount = Total initial Margin - Total Margin Account balance = $24,600 - $15,490.64 = $9,109.36 or $9,109.36/3 = $3,036.45 per contract.