$300 Day Trading MArgins! WHY?!!!

[ML_QUANT]

In times like this, this is scary...
A Major Bank collapse, or any other bad news could easily drop the ER2 > 3 points in seconds and then this broker's risk control and the Stop Losses kick in that itself would send the market into a spiral.
Who will then hold the Bag? The rest of us?
Why does Global Futures advertises such reckless offerings?

 

[bighog]

Only pikers trade ER2 because it is NOT used by professionals as a bonified hedging instrument........THIN volume because FEW players, few players is the answer to your question.

The CME gave up the license for ER2 to the redneck outfit in HOTlanta.

 

[ML_QUANT]

These are exactly my points!
It's all those reasons that makes it so scary!
I didn't say I trade it, although I DO but only paired to take advantage of the same lack of liquidity!
Mind you, during a major Bank collapse, it won't take more than a few seconds to send the ES into a 6 points drop.
You've seen it happen at Fed times, the same could happen in a normal day.
Of course, there are always the circuit breakers too but...

Quote from bighog:

Only pikers trade ER2 because it is NOT used by professionals as a bonified hedging instrument........THIN volume because FEW players, few players is the answer to your question.

The CME gave up the license for ER2 to the redneck outfit in HOTlanta.

 

[austinp]

<i>"Why does Global Futures advertises such reckless offerings?"</i>

Obviously it's a loss-leader... a sales feature that doesn't really function. In today's world, brokerages do not have much to separate themselves from one another. Coming up with different ad twists is part of attracting clientele

No emini trader will last two weeks (if two days) by consistently using max leverage per trade. A $3,000 account trading ten eminis per turn is certain death. The brokers know this, they aren't stupid. Some traders do opt to work ten contracts per $10k balance at certain times, but that requires skill & understanding of aspects outside this conversation

fwiw: there are ER2 traders working 100-lot orders intraday, sometimes several of those blocks at a time. At $1,000 per tick or $10,000 per index point on a trade, I'm not sure they qualify as pikers.

Maybe someday they'll reach the average ET poster's trade size. Until then you can watch them at work in your T&S applet every day.

 

[bighog]

look chicken little..............DEAL WITH IT!!!!!!

Yes, they are pikers compared to ES or NQ. The CME was not worried to give up the license agreement to the ER2 now were they?

Be my quest go trade the stuff in Hotlanta. Truth be known the CME is better off without that dog, why spend time, resources, etc, etc on something that compared to ES, NQ is dragging down the show. Redneck ( pretend to be a real) exchange and energy futures have created a shitload of problems for the entire industry. Maybe Phil Gramm will move to Hotlanta and screw things up more.

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[Jayford]

Quote from bighog:

Only pikers trade ER2 because it is NOT used by professionals as a bonified hedging instrument........THIN volume because FEW players, few players is the answer to your question.

The CME gave up the license for ER2 to the redneck outfit in HOTlanta.

guess I am a piker. I make more on this contract than i do on any other index, and even more than bonds (per contract). i never over leverage, and would never trade via Global, but I believe ER2 is a fantastic trading vehicle. Its a freight train once it gets moving. I will be bummed once it moves to ICE as it barely has enough volume now.

 

[bighog]

I myself am a PIKER in the true sense of the word. That was a mistake to say, it drew you guys away from the gist of the posting.


ICE sucks, they are NOT a REAL exchange. Ok, i corrected my mistake, lets make some bacon. I will not argue if ice sucks a little or a lot. DONE

 

[increasenow]

If you understand risk and use tight stops...certainly $300 or $500 ES daytrade margins should be allowed...you know what is bad...the FOREX deals that 'take the money'...

 

[Jayford]

Quote from increasenow:

If you understand risk and use tight stops...certainly $300 or $500 ES daytrade margins should be allowed...you know what is bad...the FOREX deals that 'take the money'...

i don't think so as too many people doing this can sink a futures firm really fast. I don't believe it has happened yet, but it is just a ridiculous amount of margin

if you understood money management well, you wouldn't leverage yourself to this degree. your stops would have to be so tight that noise would constantly take you out. i use very tight stops at 1.5 on average, but that would be 16 to 26% loss on 500 or 300 margin respectively. So don't trade that many contracts? Exactly! That's why margins should be $1000 min in ES imo.

 

[dmcw]

Quote from ML_QUANT:

In times like this, this is scary...
A Major Bank collapse, or any other bad news could easily drop the ER2 > 3 points in seconds and then this broker's risk control and the Stop Losses kick in that itself would send the market into a spiral.
Who will then hold the Bag? The rest of us?
Why does Global Futures advertises such reckless offerings?

I'm not sure I'm qualified to speak for management on this. I'm just a broker here, but I have a few points to make:

1) $300 is not our standard margin. It's availble to qualified clients who are willing to pay slightly higher commission rates.
2) $300 day margins are not offered for the ER2
3) $300 day margins have are limited to a maximum position size
4) We don't want to see our clients go debit either (believe me), but we have an adept in-house margin department to monitor accounts and they are able to negate the risk of debits.

Personally I don't reccommend $300 day margins to anyone, but some people like to have the option.