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Silver Futures Margin Call: Price Trigger Explained
Chapter 17, Problem 3(choose chapter or problem)
A silver futures contract requires the seller to deliver 5,000 Troy ounces of silver. Jerry Harris sells one July silver futures contract at a price of $28 per ounce, posting a $6,000 initial margin. If the required maintenance margin is $2,500, what is the first price per ounce at which Harris would receive a maintenance margin call?
Questions & Answers
QUESTION:
A silver futures contract requires the seller to deliver 5,000 Troy ounces of silver. Jerry Harris sells one July silver futures contract at a price of $28 per ounce, posting a $6,000 initial margin. If the required maintenance margin is $2,500, what is the first price per ounce at which Harris would receive a maintenance margin call?
ANSWER:Step 1 of 2
Given data:
A silver futures contract requires the seller to deliver 5,000 Troy ounces of silver.
Jerry Harris sells one July silver futures contract for $28 per ounce, posting a $6,000 initial margin.
The required maintenance margin is $2,500.
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Silver Futures Margin Call: Price Trigger Explained
Want To Learn More? To watch the entire video and ALL of the videos in the series:
Explore a real-world investor scenario in this video, where Jerry Harris engages in silver futures trading. Learn how initial and maintenance margins work, and discover the price threshold that could trigger a margin call. Gain insights into risk management in futures trading and the implications for investors.