Future contracts

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I want to ask about future contracts.How the profit is calculated and the position is closed?.suppose I entered in a contract worth $100(agreed price) delivery:after two months.The inital margin is 20% which is $20.Lets say price of contracts rises to $120 and now i want to lock that profit what can I do and if I sold that contract to someone what amount will he pay me?
 
If it’s a futures contract it’s done through an exchange (so the clearinghouse is your counterparty). You can simply enter into an offsetting futures contract at the current price with the same expiration and they’ll net the positions at expiration.
 
That means I can get cash only on expiration date and what about my margin account IF I close position with profit of $20 will I get complete $20 or I will only get the portion(percentage of initial margin) which is $2 if intial margin was $20 in form of cash?
 
If you enter into an offsetting position the exchange might close out the positions at that point. I’ve never done that so I’m not sure.
Maybe someone with experience in that will chime in here.
 
Futures are settled daily and the contract itself has no market value. For example, you buy a contract worth $100 and post $20 as cash margin. Tomorrow, the contract rises to $101. At the end of the day, the exchange will give you $1, so you have a futures contract priced at $101 and $21 in your cash account. If you sell the future now for $101, you don’t get any money - you already have the $1 deposited as cash.
 
ohai wrote: Futures are settled daily and the contract itself has no market value. For example, you buy a contract worth $100 and post $20 as cash margin. Tomorrow, the contract rises to $101. At the end of the day, the exchange will give you $1, so you have a futures contract priced at $101 and $21 in your cash account. If you sell the future now for $101, you don’t get any money - you already have the $1 deposited as cash.
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Can you close it out just like that?
 
Yes, why wouldn’t you be able to sell or buy a future contract in the opposite direction of your position?
 
It wasn’t a question about whether you would be able to buy or sell such a contract. It’s obvious that you can.
It was a question about whether with offsetting contracts they’d be canceled immediately or if that would have to wait until they matured.
 
All futures contracts are units of the same item, like electric charges. So if you buy 1 and sell 1, you now have zero. Your position is just a number, not distinct pieces added together.
 
Ohai,my question is If exchange deposits $1 in my margin account when will I be able to take those $1 home. immediately when I will close the position by taking opposite position or at maturity date?
 
You can take that money any time you want, as long as you satisfy the margin requirement for your position.
For example, let’s say the margin requirement is 20%, so you deposit $20 cash for a $100 futures position. Now, the future rallies to $120. Your new margin requirement is $24, but you have $40 in your account. So, you can either withdraw $16, or you can close your future position and withdraw $40.
 
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