What happens on the day I buy a futures contract?

Hi there,


I'm quite familiar with the theory behind futues pricing and valuation but I was wanderingt the following: What happens in practice on the day you buy a futures contract?


As far as I understand, you don't pay any price at all to get into the contract, you just promise that you will make the paymenet when expiration comes. However, you just put a small margin on a side account. Is my reasoning correct?|||when you buy a future you merely pay a transaction fee. as you might very well know the contract itself has no value.





the quote of your future at the moment you buy it is your entry level. the quote moves during the day and at the end of each day you get an ajustment. this means at the end of the day, if the price went up, you receive your profits. did the price go down you have to pay up.





the margin is your brokers way of making sure that you have enough cash on the side to meet with your obligations should you suffer a loss. if the price keeps falling and you keep making loss after loss on your adjustments. it might be neccessary to deposit more into your margin margin.|||No, I don't think that is correct. You have to put some cash down, usually 10%.





Whether or not margin can be used depends on the broker and your other assets.