Is IB account with the ablity to trade future cover under the protection.
Futures Account with insurance?
- Thread starter TGregg
- Start date
Yeah Amp advertises $400 margins for ES and I believe if you agree to pay a higher commission they will even give you $300 margins.
Lower $$$ Margin, just means you can leave less $$$'s at risk and keep trading which is good incase the broker your with disapear and does a runner with your $$$'s.
I agree with Surf's keep the account to pretty near margin requirement, forget the 3%, that's 3% of your account + bank account ofcourse, as it's still trading money just kept safe.
I'm Negative safe from FXCM so all good for me doing this.
I agree with Surf's keep the account to pretty near margin requirement, forget the 3%, that's 3% of your account + bank account ofcourse, as it's still trading money just kept safe.
I'm Negative safe from FXCM so all good for me doing this.
I find I actually trade much better when I'm running down close to my margin limit....self defeating behavior I'm sure when I have excess margin.
It was something I was considering doing anyway, not just account protection, stop me from taking 2nd, 3rd and 4th position, to be fair I don't mind 2nd can't be that accurate after all, but gets silly at times LOL then before you know it a months wages is blown in 30mins NOOOO!!!!
A similar scenario had been discussed on ET before for the same issue. It seemed no solutions then.
" https://www.bu.edu/rbfl/files/2013/09/The-Collapse-of-MF-Global-and-Peregrine-Financial-Group.pdf
On October 31, 2011, MF Global, Inc. (“MF Global”), a
major futures commission merchant (“FCM”), became the eighth-
largest bankruptcy in U.S. history. Even more striking than its
magnitude, MF Global’s failure marked the first time in history that
segregated customer funds vanished from an FCM. Given the
industry’s strong track record of protecting segregated funds, the
swift collapse of MF Global and the enormity of the customer funds
missing has “shaken the very core” of the futures industry.
"
"
Next Steps for Protecting Commodities
Customers in the Future
1. Proposed Creation of a Futures Investor
and Customer Protection Fund
...
2. Streamlining or Merging the Operations
of the SEC and CFTC
...
3. Future Developments and Next Steps
...
"
$500 margins for ES is excellent for a profitable trader. Less of the exact risk/exposure that you are asking about in this thread.
-burn8
1. I have clients who used to keep well into six figures in their futures accounts - since the MF and PFG fiascos, they are keeping just a fraction of that in their trading accounts. They are also keeping multiple FCM accounts - if one of the clearing firms requires more $$$ they can wire it within an hour.
2. Just because a broker allows you to trade levered on $10K doesn't mean that $10K is your total risk. Read the documents you signed when you started the account. If you are an independent trader you are personally on the hook to them in a big way for any losses or margin requirements in excess of your equity balance.
3. The October 19, 1987 CRASH was largely caused by the idea of "portfolio insurance". Granted, it wasn't done well, but the point remains.
http://www.federalreserve.gov/pubs/feds/2007/200713/200713pap.pdf
4. Just guessing on the face of it, for many traders the insurance premiums from a competent third party actuarial sufficiency standpoint would likely exceed many of their annual net returns. Just my guess, but I think I wouldn't be far off.
2. Just because a broker allows you to trade levered on $10K doesn't mean that $10K is your total risk. Read the documents you signed when you started the account. If you are an independent trader you are personally on the hook to them in a big way for any losses or margin requirements in excess of your equity balance.
3. The October 19, 1987 CRASH was largely caused by the idea of "portfolio insurance". Granted, it wasn't done well, but the point remains.
http://www.federalreserve.gov/pubs/feds/2007/200713/200713pap.pdf
4. Just guessing on the face of it, for many traders the insurance premiums from a competent third party actuarial sufficiency standpoint would likely exceed many of their annual net returns. Just my guess, but I think I wouldn't be far off.
I used to do that with an Interactive Brokers account but then they invented the "exposure fees" and now that tactic is costly.