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Newbie to Futures: Margin relative to account size

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Market Wizard
Boca Raton
 
Trading Experience: Advanced
Platform: Variety
Broker/Data: Optimus Futures, LLC
Favorite Futures: Futures
 
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sienna View Post
Hi All

Been trading Spot FX, but I am new to Futures, hence this super basic question on margins relative to account size. Thanks to anyone with the patience to give feedback at such basic level.

Lets say I have 15k (Example only) and want to trade ES. How do I calculate the margin relative to 15k? I should add that I am not wanting to see how little I need to have in my account. Rather, I need to know the risk dependant on predefined stops etc and then add a 'mature' buffer to avoid stress and account blow out.

I will NOT hold trades overnight. ES on Ninjatrader is Initial Margin 5060/ Maintenance margin 4600/ Intraday margin 500,- Bearing in mind that I will provide an extra buffer of a few thousand, is my calculation correct?

If I buy TWO contracts of ES should I should allow for:
1) Minimum funding of (Initial Margin) 5060 x 2 = 10120,- (??)
2) Minimum funding of 500,- x 2 = 1000,-
3) Total funds needed: 11120,- PLUS buffer of a few thousand depending on where I place my stops.

Correct? I will be incur a margin call if my account falls to maintenance 4600 x 2 = 9600,- (??).

Now if I was to hold positions overnight. How would the above change.

Thanks a bunch
Sienna

If you do not have the intention of holding positions over night, then you should not worry about the overnight margins.
This is the initial margin. They only apply to those who hold over night.

In your case, concern yourself with the number of contracts you trade per intraday margins, and the risk management that is associated with that. Margin calls occur only if you do not have sufficient capital to hold over night. You need to find out what your broker considers day trading hours. For example, some of our FCMs consider day trading margin end at 3:55 EST and some let you keep until 5.00 PM EST.

I hope this helps.

Thanks,
Matt
Optimus Futures

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PM with any questions about optimusfutures (800) 771-6748 (561) 367 8686. THERE IS A SUBSTANTIAL RISK OF LOSS IN FUTURES TRADING.
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