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Understanding Margin: the Rocket Fuel of Futures

Posted by TopstepTrader on August 07, 2019

The concept of margin is sometimes confusing for new futures traders because it is very different than the margin used for buying stocks, exchange-traded funds, or bonds. In the world of stock trading, margin is a down payment, often up to 50% of the value of the purchase, to take ownership of the shares. In futures trading, on the other hand, margin is a good faith deposit and not a down payment. Let's see how it works.

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Topics: Trading Basics, Futures, Trading Education, Margin

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