[EMAIL PROTECTED] wrote:
>
> Boy, do you have the wrong impression of how futures work!!!
>
> (From a professional futures trader),
>
> Hans.
>
> Bob wrote:
>
quote buster
> > I would say the opposite. Most pork belly futures contract owners do
> > have the financial capability to take delivery. Say a single contract
> > is worth USD 100,000. And the owner put down 5% to buy it. Where did
> > the other USD 95,000 come from? The broker loaned it to the owner.
> > Ya think the broker just goes around loaning those amounts to anybody?
> > No. The owner of the contract had to put up collateral for the $95,000
>
> The broker doesn't loan anybody anything!
You are right in a lot of cases. I was wrong about that.
Technically a loan isn't made. However, if things go wrong
for you, you owe. If you don't have the wealth required,
you're in deep dodo. They're going after your assets.
Financially healthy futures brokers don't open accounts
with just anybody.
I guess what they're doing now a days is watching your account
like a hawk and not hesitating to take control of it. But if
they can't bail you out, you owe.
I hope you're in the 5% that make it.
> Quote buster (is this needed anymore?)
bob
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