My understanding is that a futures delivery contract has a specific quantity and date. If i sell an option to take delivery of 1 mil. ounces of gold on Nov 22, 2007 at $300 per ounce and gold goes to $400 per ounce on Nov 22, 1999 that does not give you the right to call for delivery of the gold in 1999. You have to wait until 2007 to get the gold. But, since the price has gone up so much, you want assurance in the form of Margin Money to insure that you will get your gold. Once 2007 comes and you get your gold, you give back the Margin Money. At least that's how it used to work with cattle futures.
Now I finally know what a margin call is all about (never dared to ask) - and am more confused than ever.
If a margin call is basically a guarantee that the underlying future contract is fulfilled, then: Where there any doubts about Ashanti's abilitiy to deliver the hedged quantity of gold at the given dates? Then I'd take my loss and run! Generally, in a futures contract, who decides under what circumstances margin calls can be made? Is it written in the contract?