Home > Term: good faith deposit
good faith deposit
Used in the context of commodities. Refers to the initial margin account deposit needed when buying or selling a futures contract; approximately 2%-10% of the contract value. Used in the context of securities to describe the deposit required by securities firms engaged in transactions on behalf of a new client. Also used to refer to the deposit with a municipal bond issuer by firms competing for the underwriting business.
- Part of Speech: noun
- Industry/Domain: Financial services
- Category: General Finance
- Company: Bloomberg
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- Jessehe
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