The effective interest rate on the leverage component of futures trading?
Hi
I'm trying to get an overview over what I pay for a futures contract. On a regular mortgage is quite clear what the effective interest rate is, as the bank provides it. But when trading with futures its not that clear. Someone told me its simply the risk-free interest rate, but I am not sure if this is correct.
This far I've been able to identify one cost:
- The alternative cost of what is in our margin account
Do you guys know more or the whole picture? Thanks
It’s usually the overnight risks free rate.
Assumed exchanges are good margin clerks and stop guys out or pay themselves so neither said of futures contract has credit risks.
What exchange do you recommend for futures trading? I've read much about CBOE and LIFFE but i'm not sure if its possible to trade on them for individuals
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