Futures Brokerage Account

A futures brokerage account is similar, in certain respects, to a traditional securities margin account in that all balances and positions are held at the brokerage firm on behalf of the client.  A major difference is that most of the cash deposited in the account is typically invested in short term U.S. Treasury bills.  Cash that is not invested in Treasury bills typically earns interest from the brokerage firm.  The cash and Treasury bills on deposit in the account serve as the margin for the long and short positions in which the account is invested.  Positions taken in futures markets are marked to market daily and the account is then either credited with profits or debited for losses as prices change from the day positions were initially entered.