NISM Certifications · NISM-Series-XXI-A: Portfolio Management Services (PMS) Distributors · Derivatives
An investor buys one lot of Nifty futures at 22,000, lot size 50, and the initial margin is 12% of contract value. What is the initial margin required?
The initial margin required is Rs 1,32,000. The contract value is 22,000 multiplied by the lot size of 50, which is Rs 11,00,000, and 12% of this amount gives the margin.
- ARs 1,32,000Correct
- BRs 1,10,000
- CRs 66,000
- DRs 2,64,000
Explanation
Contract value = 22,000 x 50 = Rs 11,00,000. Margin = 12% x 11,00,000 = Rs 1,32,000. Rs 1,10,000 uses 10%; Rs 66,000 uses half the lot size.
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