Deposits and Margins

Deposits

When opening an account to trade futures and options, your NZX Futures and Options Advisor will ask you to make an initial deposit. This deposit will vary and is retrievable when contracts are closed out (if they are not eroded by loss).

Initial margins

In addition to this deposit, your NZX Futures and Options Advisor will ask for enough money to cover the initial margin for each futures or options contract you wish to buy or sell. The initial margin is the amount you must pay to the NZX Futures and Options Firm to enter into a futures or options contract.

At the end of each day SFE and its clearing house mark-to-market your open positions (ie, futures or options contracts that you have not closed out). This is the process by which your NZX Futures and Options Advisor adds and deducts the gains and losses from your account balance. During volatile trading your positions might be marked-to-market more frequently than once a day.

• For further information on margins see the Clearing section.

Variation margins

If your inital margin deposit falls below a certain level (as determined by your NZX Futures and Options Firm) your NZX Futures and Options Advisor will ask you to deposit additional money into your account to bring your margin back up to the required minimum. This is called a variation margin. In the event that you have made a profit from your position in the market and have closed out your position, you are able to withdraw money back from your advisor.