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No they wouldn't have gone out of business. Futures is a zero-sum game, for every dollar lost there is another one won. In the worst case, they would have take
by 21 8y ago
No they wouldn't have gone out of business.
Futures is a zero-sum game, for every dollar lost there is another one won. In the worst case, they would have taken all the profits from the other traders and used them to offset this losing trader.
- jjnoakes 8y agoI'm stupid when it comes to this stuff. But how would that work if the traders making the profits withdrew their profits? You can't claw it back after the money leaves your accounts... right?
- 21 8y agoYou are right. Which is why they don't allow you to withdraw the profits until all contracts are settled: > When a close-order is executed and filled, the corresponding futures position is then closed. The unrealized profits and losses will therefore, become realized. It can be used as margin of the contract, but cannot be withdrawn until the contracts are settled.