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Performance bond/margin

Posted by Svetlana Tokunova
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In commodities, an amount of money deposited to ensure fulfillment of a futures contract at a future date. Option buyers do not post margin – also called performance bond – since their risk is limited to the option premium, which is paid in cash when the option is purchased. Option sellers are required to post performance bond/margin to ensure fulfillment of the options rights.

 

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