CME changes margin req to INITIAL = MAINTENANCE !?!?!?

[DisciplinedHedg]

CME has just notified all that Initial/Maintenance ratio now equals 1.0.

This strikes me as a significant change to say the least.

Margin calls anyone?

http://www.cmegroup.com/tools-information/lookups/advisories/clearing/files/Chadv11-399.pdf

http://www.zerohedge.com/news/cme-g...s-maintenance-margin-equal-initial-everything

 

[Cdntrader]

Quote from DisciplinedHedg:

CME has just notified all that Initial/Maintenance ratio now equals 1.0.

This strikes me as a significant change to say the least.

Margin calls anyone?

http://www.cmegroup.com/tools-information/lookups/advisories/clearing/files/Chadv11-399.pdf

http://www.zerohedge.com/news/cme-g...s-maintenance-margin-equal-initial-everything

Margin Call Monday!....looks like traders are the next group to "deleverage"

look out below...:eek:

 

[KageRyu]

So do we expect a massive drop as brokerages liquidate positions?

 

[jeb9999]

Probably has to do with the forced liquidations anticipated on Monday from the transferred MF Global accounts .

 

[DisciplinedHedg]

This issue needs to be clarified...

All I know is that increasing margin under duress can't be good for those markets.

Maybe this will be withdrawn before Sunday open...or won't affect most markets...needs clarification.

 

[KageRyu]

Does this usually happen whenever a major investment bank fails?

 

[trendy]

This will have no effect on day trading futures. Swing trading? Well, you are either going to have to reduce positions, or pony up mo' money.

http://www.cmegroup.com/clearing/cme-clearing-overview/performance-bonds.html

 

[DisciplinedHedg]

Quote from trendy:

This will have no effect on day trading futures. Swing trading? Well, you are either going to have to reduce positions, or pony up mo' money.

http://www.cmegroup.com/clearing/cme-clearing-overview/performance-bonds.html

No effect on day trading futures?

Wrong. Brokerages (ie. IB) can auto-liquidate you intraday anytime you don't meet margin requirements. They don't have to wait until settlement.

 

[trendy]

Quote from DisciplinedHedg:

No effect on day trading futures?

Wrong. Brokerages (ie. IB) can auto-liquidate you intraday anytime you don't meet margin requirements. They don't have to wait until settlement.

You just don't get it. The initial margin is not changing. Its only the maintenance margin, which only applies to the end of day settlement price of the contract. If you are not holding a position at the end of day, then maintenance margin, whatever it may be is irrelevant.

 

[thirst]

The OP didn't ask about daytrading margin. He, like me, is wondering how this would affect the overall market. If changes to the maintenance require would cause additional forced liquidation, which again has nothing to do with daytrading or daytrading margins.