Maintenance Performance Bond (Previously referred to a Maintenance Margin)

As a knowledgeable finance professor, I want to introduce you to the concept of performance bonds in futures trading. These are necessary deposits that customers must maintain in their accounts, in addition to the initial margin. They act as a safety net to cover any potential losses in a futures position. If the equity in a customer's account drops below the maintenance performance bond level, a "performance bond call" is issued, requiring them to deposit enough money to restore their equity back to the initial margin level. This ensures that the customer's account remains secure and able to continue trading.

Related terms

Vertical Spread

Understand the meaning and definition of Vertical Spread in the context of stock market, trading, and investments.

Call

Understand the meaning and definition of Call in the context of stock market, trading, and investments.

Financial Analysis Auditing Compliance Tracking System (FACTS)

Understand the meaning and definition of Financial Analysis Auditing Compliance Tracking System (FACTS) in the context of stock market, trading, and investments.

Margin Requirement for Options

Understand the meaning and definition of Margin Requirement for Options in the context of stock market, trading, and investments.

Inverted Market

Understand the meaning and definition of Inverted Market in the context of stock market, trading, and investments.

Expiration Cycle

Understand the meaning and definition of Expiration Cycle in the context of stock market, trading, and investments.

VIEW ALL