Emini Trading – Margin in Emini Futures

Filed Under (Trading Articles) by Poztman on 13-03-2010

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If you are aware of the possibility of exchange of shares, to know that the amount that the broker can give you the guarantee fund. Usually it is 100%, that is, if you have $ 10,000 in your account, you can control $ 20,000 in stock. In some cases, are only pre-or semi-professionals made it possible to exploit the margin may be higher.

While the margin trading of the shares is simply the record of credit for inventory, the margin on futures contractshow can a minimum requirement for the cash position to define your own. Similar to a bond or a deposit in good faith, and the margin on futures contracts with the volatility of the stock market is based listed and are subject to change, if this change in volatility. In general, rates range 2-15 per cent of the value of the futures contract, with the majority of the contracts that define its margin of 5 percent.

Individual agents may change the value of this marginIntraday positions are the positions of opening and closing the same day. Therefore, the margin varies much so, a real estate agent to another, does not exceed the value determined by the rate that instead of considering all types of positions, even at night, for which the margin of necessity be higher for volatility increasing compensation time, if trade is not very active.

There are two types of futures margins: the initialMargin and maintenance margin. The first is the amount of resources required prior to transport your items are submitted. This is the minimum amount of money and purchasing power necessary to maintain the open position.

Although the initial margin requirement must be fulfilled at the time of the transaction, the maintenance margin has become a factor, if the account value decline. If the value of taking into account the maintenance margin isreceive funding margin calls. In this case, you should have enough cash in the initial margin requirement of the position to do justice.

To illustrate the difference between the first and the maintenance margin, the following example.

If you have $ 5000 in trading futures account. They want an open position in intraday e-mini S & P. In order to give this trade, you would have at least $ 2250.00 in the account must (if you're aInteractive Brokers customers) to keep this real-life example, the initial margin is set by an E-mini S & P futures by the broker. Because the account balance exceeds the amount of initial margin, it would open position, the position and you can not buy one, but two contracts. Suppose you have to remain a simple example.

Suppose now that we moved to this purchase, the market is against youfall so that the account value to $ 1700, however, unlikely that one of May Because the value of the account is now below the maintenance margin of $ 1800, you receive a margin call of $ 100, the difference between initial margin and the account value.

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