Question
What does the exchange calculate first in the daily mark-to-market process for a futures contract?
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Answer
The contract's gain or loss versus the prior settlement price.
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Question
Why are futures and forwards priced similarly under no-arbitrage in the basic case?
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Answer
Both lock in future delivery, so replication gives the same no-arbitrage price.
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Question
How does exchange trading make a futures contract structurally different from a forward?
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Answer
Futures are standardized and exchange-traded; forwards are customized OTC contracts.
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Question
What triggers a variation margin call on a futures position?
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Answer
The margin account falls below maintenance margin.
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