Chapter 02 · Section 2.1

Margin Calls

                           FUTURES        PURCHASED OPTIONS     
Risk (potential loss)      Unlimited       Limited        
Margin Calls                .....           .....   
Hedging Strategies          .....           .....  
Price Protection            .....           .....

Is this statement correct? "The holder of a futures contract may be subjected to unlimited margin calls until he closes his position, whereas the holder of an exchange-traded options contract is not subject to any margin calls whatsoever."

Which trader would be required to make a security deposit, the one with unlimited risk or the one whose risk is defined and limited? Remember that a futures contract is subject to daily settlement for gain and losses.