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Don't Forget Margin and the Risk

Traders Magazine, April 2005

Mark Longo

Single stock futures are similar to U.S. equity options because each contract is for 100 shares of the underlying stock. However, instead of paying different prices depending on strikes and volatility, futures require only an initial margin payment. In the case of single stock futures, the margin requirement is 20 percent of the value of the underlying position.

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