As I understand it:
As long as you are in and out of your position in a single day trading period, you are only subject to the initial margin.
If your account falls below the maintenance margin during the course of the trading day then you will get a margin call to deposit more funds.
If you carry your position open past the close of markets on any given day, then you would be subject to the maintenance margin.
So when you open your position, the initial is taken by the the broker as security for the duration of the trade. Keep a position open overnight and you will need to cough up the maintenance amount as well.
Check the CME for open and close times. Your broker will give you this info as well.
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My understanding is slightly different from @Grantx's -
Initial margin: you need this to start trading at all.
Day margin: you can go down to this level as long as you trade only within day market hours (means you can't keep a position open after the market's official closing time)
Maintenance margin: you need this level if you intend to keep a position open after market's official closing time, in other words, keep positions open overnight.
So, to recap
The following 2 users say Thank You to xplorer for this post:
Another point: depending on your broker's requirement, it may be that the 5500 USD initial margin may be what they require if you intend to carry positions overnight, but if you do not, even the initial margin may be considerably lower.
Again, this is a per-broker requirement so you may be better off checking with them.
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Here the example of today for German DAX Future: in EURO
Intraday Initial 1 14338.46 FIRST contract DAY
Intraday Maintenance 1 11470.77 2nd to x contract DAY Overnight Initial 28676.91 FIRST contr. Night
Overnight Maintenance 22941.53 2nd to x contract over night
Sorry - table does not work nicely
Hope this helps
GFIs1
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Futures are a highly leveraged trading product. Margins are "good faith deposits" that a trader must maintain in order to trade a particular product. There are three different types of margins:
Initial Margin
As the highest amount required for a contract, this comes into play on the first day that an account decides to hold a position through the trading session. Meaning, if a trader buys a contract and does not want to close it out in the same session, this amount is required per contract. Initial Margin is set by the exchange (not by the FCM/broker)
Maintenance Margin
The amount set for this category is also provided by the exchange. It represents the requirement to hold a contract from the second trading day and onward.
Intraday Margin
This is the amount an account needs to trade one (1) contract. It is also the lowest of the three listed. Insofar that the product is traded within the trading hour/session, this is the amount required. Intraday margin is set by the FCM/broker and may vary between firms.
Please note that margin rates differ from one product to another. Margins are quoted as one (1) contract and are subject to change at any time.
Disclosure: This communication is sent to you by NinjaTrader, LLC, a software development company which owns and supports all proprietary technology relating to and including the NinjaTrader trading platform.
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1. No. You need to know what amount is required by the brokerage for day trading. Typically, day trading margin rates would be lower than initial margin required by the exchange.
2. Day Trading Maintenance could be a little more complicated. Some firms require that your balance does not fall below a certain minimum others may have other requirements.
3. No. you need to ask the firm what specifically what they consider day trading hours. Some would quote the hours you said, while others may consider 5PM CST as a start until the next day's close.
I hope this helps.
Thank you,
Matt Z
Optimus Futures
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