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Ninjatrader Margin Update for Major Events & New Announcements


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Ninjatrader Margin Update for Major Events & New Announcements

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  #1 (permalink)
 Mich62 
Netherlands
 
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From NinjaTrader Brokerage:

"NinjaTrader has always been, and will remain, committed to being there for our traders regardless of market conditions. As your partner, our goal is to set responsible margin levels to ensure appropriate risk management is in place as our traders navigate heightened volatility related to interest rate uncertainty, ongoing geopolitical risk & other events.

Beginning Friday, October 7th, day trading margins will be increased to initial exchange margin prior to the release of key economic news announcements for any and/or all products. The temporary elevated margin requirements will remain in place until market volatility is determined to present manageable risk for our traders. Please be aware these temporary margin updates will apply to both existing positions and when entering a new position which may present significant risk to the account. You can view the full policy here.

The NinjaTrader team evaluates market conditions in real-time and if required, temporary changes to the amount of margin required for trading may be made throughout the day and for extend periods of time without prior notification. For the latest margin updates beyond those related to major events and news announcements, please visit the Order Desk Updates page which will reflect the current status of margin rates based on any temporary changes we have elected to make.
"

This will have some serious consequenties and I doubt it's even workable (constantly refreshing the order desk page during news events?) for a smaller account. For trading just one MES contract one will go suddenly from $50 to $1100. Trading just one MNQ from $100 to $1650. I am a long time NT user but this really makes me reconsider NT. I think a good CFD broker might be a good alternative although I prefer futures. Any other alternatives?

Margin Changes for Economic News Announcements

#

Edit October 7th: NinjaTrader has adjusted the rules, see Post #19.

#

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  #2 (permalink)
lightsun47
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Is that margin requirement or initial margin? I just saw their PDF and that's what it says.

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  #3 (permalink)
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Hello,

Thank you for your posts. We wanted to provide some clarity around this announcement.

The margin changes announced do not apply to our overnight margins, only to major news events.

Recently, we have seen less liquidity heading into major news events such as monthly employment data, FOMC meeting announcements, and more recently, CPI announcements. As such, our Order Desk is making some temporary updates to require initial margins for accounts that have positions which may present significant risk to the account and trader.

Our intent is to have margins returned to standard intraday rates as soon as possible following the news event, but not until conditions are viable for trading with lower requirements and liquidity has increased. Again, these changes apply only to select markets, and not all products will have their margins increased.

NinjaTrader is constantly innovating from a risk perspective and we expect to provide more flexibility during major news events in the coming months, but due to market conditions, we felt it was prudent to make this move to protect our traders.

For the most recent status on Margins from our Order Desk, please see here – Order Desk Updates

Thanks for your continued support.

Risk Disclosure: Futures and forex trading involves significant risk of loss and is not appropriate for everyone.
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  #4 (permalink)
 Lancer 
Seattle, USA
 
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What NT support told me:

Q: To avoid surprise margin increases, where can I find the list of what are the “key economic news announcements” for which day trading margins will be increased?

A: The changes to margins for major events will be applicable to many historically important announcements, such as monthly employment data, FOMC meeting announcements, and more recently, CPI announcements. It’s difficult to list which announcements will have margins updates since the relative importance of those announcements changes. Several months ago the CPI release was a non-event to the market, but as inflation has become a focal point it has become the largest market moving event each month. With this in mind, our Order Desk monitors volatility around various events and makes updates to margins when necessary to protect our traders. The intent is to have margins returned to standard intraday rates as soon as possible, but not until conditions are viable for trading with lower requirements. Again, these changes apply only to select markets, and not all products will have their margins increased.

Certain events historically had volatility impacts and other news announcements are starting to have more a volatile reaction. I believe our team is already working to implement a key economic news announcement list to add to our calendar. If they are not, I can submit your suggestion to create one. Keep in mind there may be some events, such as the Ukraine/Russia conflict, that don't have set date and impact markets greatly.


​Q: How many minutes prior to the scheduled release of key economic news announcements will day trading margins be increased?

A: At this time we are looking at 15 minutes before a key news event.


Q: How many minutes after the scheduled release of key economic news announcements will day trading margins be returned to normal?

A: There is no set amount of time after news items when margins will be returned. It all depends on the volatility. Historically most volatile moves are over within a few minutes. However, previous volatile events such as the night of the US election, had volatility lasting from market close until 1-2 am the next morning.


​Q: Is there any software development underway for a new feature in the NinjaTrader platform to give visual indication and sound alert when day trading margins are increased, then returned to normal? (For example, a colored dot similar to the existing connectivity indicator in the lower left corner of the Control Center, located next to the connectivity indicator.)

A: At this time I am not aware of any, but can pass your suggestions to our software development team.


Q: This new intraday margin policy change is going to be a disaster for NinjaTrader customers for whom margin is a concern unless you make it very clear in advance what are the triggering events (a set list), when changes will occur before and after events, and provide an in-platform indication of margin status. Otherwise, it is going to be too much to try to keep track of, and will be a major distraction during the intraday trading session, resulting in margin mistakes and customers leaving NinjaTrader. You cannot expect customers to be constantly checking the Order Desk Updates web page multiple times all day to learn the status of such an uncertainly variable intraday margin.

A: This does bring up some topics to forward to discuss with our risk management team. Keep in mind, another option is to make sure the account is properly funded if you plan on trading these news events. Leverage with the low intraday margins work both ways. If the market is moving in your direction during a news event, it can lead to profits that are higher than expected to a trader's normal trading strategy. However, if the market moves against a trader these volatile swings that occur in less than 1 second can take the account negative. In which case, the trader would need to fund the account to cover the debit as soon as possible.


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  #5 (permalink)
 Tasker_182 
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It be will important to keep the calendar events in front of you on your trading chart. One way to do that would be to use the A1MarketReminders indicator, found here: https://ninjatraderecosystem.com/user-app-share-download/a1marketreminders/

You can configure the list of events as needed, I would review (download) the video on the link page for help in seeing how that works. While you can set it for the time of the vent, to prevent margin issues you would need to give yourself the minimum 15 minutes in advance of the actual event (so perhaps 20 minutes in advance???). Perhaps you could create two reminders for each event, one 20 minutes in advance for margin and the other at the time of the event, for observation and later reference. Regrettably we would not know when the margin event ends, hopefully this will become known in the future.

If the margin event end becomes known/consistent in the future, then perhaps this indicator would be more applicable: https://ninjatraderecosystem.com/user-app-share-download/repeater/ as with this you can specify the begin and end time of the zone, however you would likely have to set this up every day for the different events (so create templates and make it easier). The advantage is that you can get a colored block of time that makes it visually easier. I use this myself for a visual reminder 15 minutes pre open to 15 minutes post open as a no trade zone.

Alternately you could use both indicators, one for the labeling of the event and the other for the coloring of the block of time.

Of course there is the economics news indicator which connects to ForexFactory and can be set to provide an audible alert but by then you are already within the margin period...

Just trying to throw out some quick suggestions to help during this marginal time.

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 StoxFox 
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Sounds to me like @NT Brokerage will be collecting lots of $50 fees for liquidations. This is not what I paid a thousand dollars for.

"We have arbitrarily decided that such and such event is high volatility. We'll close the position for you, and surprise you with a $50 fee."

If you close the positions, fine. But then to charge $50 for doing so, c'mon... we can see where this is going.

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 StoxFox 
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Mich62 View Post
Any other alternatives?

https://edgeclear.com/low-micro-indices-rates/

10 cents for Rhithmic!

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 Pa Dax 
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Perfectly OK with changing margin requirements at set intervals during set times and maybe even for as long as required after the event.

BUT, to keep the flexibility to just go and fire this rule off at random intraday without prior warning is utter ridiculous particularly in the eyes of risk management. Challenging it to even be legal.

Ninjatrader has become a risk itself now for us traders. The minimum should be a list of targeted economic events that you can change on a daily basis but you really can't change the rules of the game during the game withoit as little as a heads up. Any funded account simulator vendor has a better set of rules.


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 Pa Dax 
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Lancer View Post
]



A: This does bring up some topics to forward to discuss with our risk management team. Keep in mind, another option is to make sure the account is properly funded if you plan on trading these news events.




@NT Brokerage

Having full margin requirements completely reduces the need to 0 to use your platform as I already have brokers for that as we all have. The first thing you advertise on your website is the low margins so you know yourself how this is a deciding factor for traders.

2nd. You write 'these news events'
The whole problem with you is now that you haven't defined these news events!

Question: why not as in other events and things, just double the intraday margin requirements as you had during pandemic instead of jumping to overnight margin? That for sure would not affect me.

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 elynt 
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I agree with all the points raised here. This decision feels very "off the cuff." For what can amount to more than a 20x margin increase, I expect concrete guidelines instead of a vague newsletter post that is not articulated elsewhere. Their link to read the "full policy" is even less substantive than the newsletter post.


There's enough of a workload involved in trading without needing to think about margin. It's a shame - I've been a happy customer with NT Brokerage for quite some time now, but it might be time to move back to Interactive Brokers. If I have to trade with what amounts to full margin in order not to think about requirements, I might as well do it with a more established broker. I'm curious to see how this change works in practice.

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