Why do futures markets need margin system?
Hello, in order to control the risks of futures trading and improve the efficiency, the member brokerage companies of futures exchanges must pay the settlement deposit to the exchanges or clearing houses, and both parties to futures trading must pay a certain amount of deposit to the exchanges or clearing houses through brokers after the trading. Because the margin ratio of futures trading is very low and has a high leverage, hedgers can find ways to avoid price risks for large-value spot assets with a small amount of funds, and also provide speculators with opportunities to make profits with a small amount of funds.