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Regulated Futures Contracts and Options on Regulated Futures Contracts create the obligation or
grant the right to either "make or take delivery" of a specific amount of a specific commodity
or financial instrument at a specific price on a specific future date. Generally, these
binding agreements commit the holder to either buy or sell "wholesale quantities" of the underlying
commodity or financial instrument and therefore have a face value in the thousands, if not,
hundreds of thousands of dollars.
To insure the performance
(at expiration) by the parties, the Exchanges require the posting of a Performance Bond or Margin
Deposit from both parties, with daily settlement of the changes in a particular contract's
Mark-To-Market Value. Generally, this Margin Deposit is less than 5% of the contract's face value
and, therefore, provides a significant level of leverage. This leverage can either work in an investors
favor or to his detriment, and can result in losses far in excess of the initial capital deposited
as well as gains of similar magnitude.
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Alliance provides customers access to Regulated Futures and Options Markets through its
affiliate, Integrated Brokerage Services, LLC (IBS), a registered futures commission merchant and
a member of the National Futures Association. All customers' futures accounts are introduced to
Integrated Brokerage Services, LLC on a fully disclosed basis.
For more information about Alliance's futures clearing services call 800.452.8676.
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