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Margin: initial vs maintenance vs day trading
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Margin: initial vs maintenance vs day trading

  #11 (permalink)
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xplorer View Post
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

That help's clarify things. So, when is the market's official closing time then for the ES?

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  #12 (permalink)
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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.

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Last edited by NinjaTrader; August 8th, 2017 at 10:03 AM.
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  #13 (permalink)
Market Wizard
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ALC77 View Post
That help's clarify things. So, when is the market's official closing time then for the ES?

E-mini S&P 500 Futures Contract Specs - CME Group

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  #14 (permalink)
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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:
...

no clue on first trading day vs second trading day, now it's all clear, thanks.


Last edited by cory; August 8th, 2017 at 11:40 AM.
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  #15 (permalink)
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ALC77 View Post
I'm confused about margin. My broker for ES: $5,500 initial, $5,000 maintenance, $500 day trading.

1. If I ONLY want to day trade, do I need $5,500 initial margin in my account per 1 lot (ES)?

2. If I ONLY want to day trade, do I need $5,000 maintenance margin in my account by 4 pm CT per 1 lot (ES)?

3. If ONLY day trading the ES, I must buy after 8:30 am CT and sell by 4:00 pm CT, correct?

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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