The main functions of margin are: 1 to ensure the integrity of futures contract structure. It is a kind of financial guarantee to ensure the performance of buyers and sellers. If the buyer and the seller fail to settle the future positions before the expiration of the contract, they must settle the actual goods according to the provisions of the contract.
2. Deposits also play a role in controlling the speculative activities of transactions. When speculation is rampant and the price fluctuates violently, the board of directors of the exchange can raise the margin level of a certain commodity according to the current situation to curb excessive speculation. On the other hand, when the commodity trading is dull, the trading ownership will be reduced due to the margin, so as to attract more customers to conduct futures trading.
Deposit convention is also called deposit, mortgage risk, etc. It means that the parties agree that the debtor or the third party will pay a certain amount to the creditor as a guarantee for its performance of the debt, and the deposit will be returned or deducted when the debt is performed; When the debt is not performed, the creditor can be paid in priority. The person who pays the deposit is called the grantor, usually the debtor or a third party. The person who receives the deposit is called the mortgagee, and he is a creditor.