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As of the close today, there is another margin change of $1000 to $4,700 on NG.
Thank you,
Matt Z
Optimus Futures
There is a substantial risk of loss in futures trading. Past performance is not indicative of future results.
Trading futures and options involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results. You may lose more than your initial investment. All posts are opinions and do not claim to be facts. Please conduct your own due diligence. Use only Risk capital when trading Futures.
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Trading: Primarily Energy but also a little Equities, Fixed Income, Metals and Crypto.
Frequency: Many times daily
Duration: Never
Posts: 5,049 since Dec 2013
Thanks Given: 4,386
Thanks Received: 10,206
ICE announced they are increasing margins on Monday night.
EIA reported Natural Gas Stocks were down 134 BCF last week, which is one of the largest withdrawals ever in November. So not only do we have a very low stock level going into winter, but we have started pulling out a last faster than normal as well.
Trading: Primarily Energy but also a little Equities, Fixed Income, Metals and Crypto.
Frequency: Many times daily
Duration: Never
Posts: 5,049 since Dec 2013
Thanks Given: 4,386
Thanks Received: 10,206
This weeks withdrawal (59) was less than expectations (ice was -70/-66 this morning) but it was still one of the largest withdrawals for this week of the year and hence storage levels continue to look even lower versus average.
This is very intersting! You are clearly on another level of trading with NG and I do apologize for my ignorance, but what is the relevance of margin increase or decrease for this matter? Do you use this as a edge in your trading? Thank you in advance.
Trading: Primarily Energy but also a little Equities, Fixed Income, Metals and Crypto.
Frequency: Many times daily
Duration: Never
Posts: 5,049 since Dec 2013
Thanks Given: 4,386
Thanks Received: 10,206
Margin is the amount of money you have to post at the exchange to support open positions. If your highly leveraged, meaning that you have a lot of open positions in proportion to your account equity, an increase in margins may force you to have to close positions - not due to losses, but due to increased margin requirements. This can sometime cause they market to move, if a big position needs to be liquidated, but that is impossible to predict ahead of time.
For large energy traders - thinking companies here, not individuals - it's quite common to have large positions across multiple exchange (For Oil ~ CL, HO & RB on CME and Brent & Gasoil on ICE, and for Natural Gas & Power ~ NG on CME, Basis, Index & Power on ICE, and Options on NASDAQ) so when margin rates go up a lot you will often see positions moved between exchanges to get the best spread offsets available. This is done, over the counter, using block trades though, and rarely effects prices.
Apologies if some of what I stated was obvious, just trying to be clear.
