How can a 2.5% price move wipe out half your margin, and how much do futures prices really tell us about the future?
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Futures margin versus full funding in an ETF
Record that a futures position posts roughly 7–8% of notional as margin while an ETF of the same exposure needs 100%, and name the feature of futures settlement that permits the difference.
Return on posted margin after a small price move
Work the example of $100,000 margin (5%) supporting $2 million notional through a 2.5% one-day price drop to its −50% return, and record that a fall equal to the margin percentage wipes out the account.
Controlling the risk of a leveraged futures position
Write down what a futures broker assumes about the trader (margin that can be lost, speculation without over-leverage or hedging against held assets) and the need for tight, sometimes intraday, risk controls.
The range of futures contracts and what their prices reveal
List the contract types covered (rates, bonds, currencies, single stocks, VIX, electricity, elections), and state the limit on how informative futures prices are, with autumn 2008 as the example.