Interest on deposit in margin account

CFA Level I Derivatives
#1

Hello,

is it right that an investor does not earn interest on the money placed in the margin account when buying futures? I think I read it somewhere in the mass of papers but cannot find the passage now.

I am just asking because in reading 66 and reading 67 commodities there is a list with sources of return and there it says roll yield, spot price and collateral yield. The latter is the return on cash used as a margin…

#2

One typically deposits Treasury bills in commodity margin accounts; the return on the Treasuries is the collateral yield.

If you deposit cash – literally cash, write them a cheque – then I doubt that you’d earn interest on that cash. Commodity exchanges don’t strike me as that generous.

#3

I see. So it is not interest on cash but the T-bills return.

Thank you!

#4

My pleasure.