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I appreciate your candor. So you're saying that if there were a client with a $-2K cash deficit from a (conventional) futures loss, but a $+10K position in options on futures, you may actually use discretion and not liquidate that account's options on futures position?

Of course that's ideal. I'm just curious about the mechanics that take place when an account is in a cash deficit and there are non-cash positions (like options on futures). Do they get liquidated immediately to meet the deficit?

etrade

So you're saying that the exchange has built-in mechanisms to automatically liquidate positions and prevent a cash deficit? I've encountered some less diligent brokerages that seem to not follow this practice, leaving their clients vulnerable to holding positions with resulting cash losses. In...

Yes, I know they'll close the position. But let's assume there is a cash deficit when the position is closes: The trader didn't use a stop, and the brokerage firm's risk team was lazy. Now there's a cash loss of $ -2000 USD in the account. Let's also say the "options" collateral are "options...

Let me rephrase my question, so that it's based on your assertion that closing the position is in fact the first move of the brokerage firm. In the hypothetical scenario where: You have a one lot futures position that gets closed by the brokerage firm while you are on vacation. After closing...

Thanks for your reply. I'm actually curious about the scenario in the example I posted, specifically, not multiple instruments. In the example, I'm assuming the entire futures position needs to be liquidated.

In the situation where a futures position moves against you, resulting in a margin call while you are on vacation and unreachable, and where there is other collateral in the account (such as equities, options on futures, etc.), what happens? I imagine one of these three scenarios? A) The...

I'm curious about the most efficient method to go long on volatility over a one-year time horizon. Products like VXX and UVXY feel compromised by their structure, being too susceptible to theta-decay value drip when VIX futures are in contango. So they don't suit my preferences. In my opinion...

Yeah, there were no margin issues. @Slow Learning Elf got it right. And actually on a day like yesterday, with its relatively big more, liquidity on the spreads themselves improved a lot.

I've observed two things recently: 1. IB has really attractive margin rates for borrowing in Yen. 2. IB also has low margin requirements for trading government bonds. Could someone potentially buy US 30-year bonds using borrowed Yen, thus levering up to capture the spread in rates? My thought...

Thanks. I'm imagining a trade involving 40 spread units. It's not out of the ordinary for ES to move significantly, say by 100 points, after the regular trading hours due to unexpected news. In such cases, the front contract in a calendar spread might adjust quickly, but the longer-dated...

Thank you for your insights. I'm particularly interested in longer-dated spreads for a few reasons: Firstly, I already have a stance on the yield curve expressed through SOFR, but my account limits my total exposure on those products. Secondly, it appears that the margin requirements for index...

Thanks, I probably wasn't clearly communicating. My question isn't about the margin requirements specifically. It's more about how a significant after-hours movement in the near-term leg might affect the available margin in an account. Specifically, if the shorter-term contract experiences a...

Hi there. I'm curious to know more about how after-hours fluctuations in the price of ES can affect the available margin in an account managing positions in futures calendar spreads that include a long-dated (less liquid) leg. As I'm sure many traders on here know, ES futures calendar spreads...

Thanks. I appreciate you help.

Thanks. Would you happen to know what the difference is between that spread, which seems to feature 3 expirations among its two legs, and the spread in the image I've attached, which seems to have 2 expirations and also a lower maintenance?

Yeah I mean 24 / 25

BTW, I may have this wrong regarding efficiency, but if $250 is truly the maintenance per spread... Assume recession happens: - Calendar: Spread closes to 0 = (~150 points * $50) / $250 (maintenance margin) = 30:1 leverage. - Directional: SPX loses 20% = (~940 points * $50) / $12,320...

Thanks. The first example (shown below) on the page is confusing to me because there are three expirations listed. Side A Start Period 12/2023 06/2024 Side B End Period 03/2024 06/2024 Maintenance $250 Any suggestions on how to locate long H23 / short H24?