Newbie to Futures: Margin relative to account size | Reviews of Brokers and Data Feeds


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Newbie to Futures: Margin relative to account size

  #4 (permalink)

Melbourne, Australia
 
Trading Experience: Beginner
Platform: Ninja Trader
Broker/Data: Ninjatrader Brokerage
Favorite Futures: Many
 
Posts: 88 since May 2012
Thanks: 66 given, 33 received


mattz View Post
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

There is a risk of loss in futures trading. Past performance is not indicative of future results.


Thanks Matt,

But would you simplify it further for me? Just confused on a basic point.

If I buy TWO contracts of ES and do not hold overnight, which is a correct assumption on costs, A or B?
I a fully aware of the need to factor in additional funds in case of being stopped out, a few times in a row, based on pre-determined stops and associated % loss to overall account.

So, which is a correct assumption on costs, A or B?
A) I should allow for:
1) Minimum funding of (Initial Margin) 5060 x 2 = 10120,- (??)
2) Minimum funding of 500,- x 2 (as I'm using 2 contracts) = 1000,-
3) Total funds needed: 11120,- PLUS buffer of a few thousand depending on where I place my stops.

B) I should allow for:
1) Minimum funding of (Initial Margin) 5060 ?
2) Plus Minimum funding of 500,- x 2 contracts of ES= 1000,-
3) Total funds needed: 6060,- PLUS buffer of a few thousand depending on where I place my stops.

Thanks for your patience
Sienna

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