I have some doubts in Futures
Now what is this initial margin??? Does only buyer have to pay the initial margin in the initial margin account or the seller also have to deposit some amount ??? And Who gets the amount in that account in the end??
How this mark to market thing works??? I was of the opinion that futures are settled on their expiry date, but this thing confused me ???
Now suppose I sell a 1 month future to ABC in which underlying is 1 stocks which is now priced at 100, and my future price is say 120.
Now suppose in the example, day 1 the stock rises to 110, day 2 stock rises to 90, then how will be the mark to market thing be done??
While reading about the difference between futures and options, i came across these pointsFUTURES OPTIONS
Price is zero, strike price moves Strike price is fixed, price moves.
Price is zero Price is always positive.
Linear payoff Nonlinear payoff.
Can some1 pls explain me these 3 points ???? How come futures price is zero ??