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Suppose the initial margin on copper futures is $4,800 per contract and the required maintenance margin is $3,500 per contract. You establish a long position
Suppose the initial margin on copper futures is $4,800 per contract and the required maintenance margin is $3,500 per contract. You establish a long position with 25 contracts with each contract representing 25,000 pounds (lbs.) of copper. A day later each contract is trading down $.06/lbs.
What is the total value of your positions? Are you subject to a margin call? If so, how much?
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