One contract is = 125,000

Margin = your equity position.

Initial Margin = the amount of money you must put into an account to open the futures position. This is still your money as you have not bought the contract, instead the margin amount is your escrow (or good faith) money to assure you will be able to pay for a loss to you in the contract.

Maintenance Margin = The minimum amount allowed in your margin account. Below that amount the futures position may be closed if you do not add funds to your account.

Margin Call = When your account reaches the Maintenance level and the futures broker calls you asking for more money.

4. You want to enter 2 March contract to sell euros at $1.20. The Initial Margin requirement is 3% and the Maintenance requirement is 30% of Initial Margin requirement.

a. What is the Initial Margin dollar amount?

b. At what margin amount will you receive a margin call?

d. At what exchange rate will you receive a margin call?