Talk:Capital (Futures)

Capital
“You say that all these terms have different, specific meanings with respect to futures, but this isn't true. The concept of capital, for instance, is no different whether we're talking about stocks, futures, private equity, or anything else. Rhobite 04:12, Feb 5, 2005 (UTC)”

Almost anything can be an asset and used as capital. Stock certificates, patents, copyrights, even toxic waste dumps in New Jersey, can be used as capital. However, I don’t expect that they can be used as margin in their current form by organized futures exchanges. In other words, unless it is in a specific (highly liquid) form, “the general concept of capital,” may not be used to Speculate in the futures markets.

The concept of capital in stocks is not the same as futures. This is the basic misconception often held by stock people. The stock traders concept does not include unrealized gains. When you buy a stock you cannot spend it until it is sold. You may borrow against it, pay interest on your own gains if you like, but you cannot spend it until it is sold. The concept of capital in futures does not recognize fantasy paper like stocks as capital. Stock certificates are not acceptable as futures margin as far as I know. Futures gains are gains and can be spent instantly to buy anything that you want, whenever you want it. We cannot say cash is required for futures margin, as certain interest earning securities as well as unrealized gains may also be acceptable. GT


 * Your constant jabs at "stock people" are becoming a little annoying. This isn't a "stock vs. futures" debate here. I'm sorry to inform you that the concept of capital is the same, no matter how many analogies you make. And didn't you agree with me yesterday, when you said "Yes you are right about Capital. My apology" ? Rhobite 22:27, Feb 5, 2005 (UTC)