Futures margin timing

B

bloomberg1

Broker offers 500.00 day trade margin for just an example in ES

What times does this actually come into effect? 08:30 est -0415: est ? Market hours of the underlying?

Thanks
 
bloomberg1 said:
Broker offers 500.00 day trade margin for just an example in ES

What times does this actually come into effect? 08:30 est -0415: est ? Market hours of the underlying?

Thanks
More...

It's for the entire market day, even when the US equities markets aren't open.... must meet exchange maintenance margin however to hold overnight.
 
bloomberg1 said:
what exact times ? Thanks

There is a time when you have to close the position to avoid a call
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The trading day starts at 6:00PM (NY time) and ends at 5:00PM. You have to reduce your position or close it if you don't have enough margin money to hold at 5:00PM close. So... that makes for going flat @ 4:55PM and reopening at 6:00PM... new commish, of course. (If you need to adjust your position before the close, brokers want you/insist to have it done by 5 mins before the close.)
 
Exact times when Day-Trade margins are in affect is dependent on the broker/FCM.

Here's from AMP...

"DayTrade Margin is set by AMP Global. This is the amount required to enter into a position per contract on an intraday basis. These margins are in effect anytime the market is open, except the last 5 minutes of each trading session. AMP Gobal request that you either flatten open positions or meet the exchange required maintenance margin during this time period. "

Here's from Gain Capital (formerly OEC)...
  • Max Position Limit per account is 5 contracts, front-month only. All other expirations are prohibited from trading.
  • Day Trade Margins 8:30am CT – 2:50pm CT – $1,000 per contract and is subject to change should the market dictate.
  • Although the market closes at 5pm CT, volume is currently concentrated to the NYSE/NASDAQ trading hours. The customer must have 100% of the Exchange Initial Margin to carry the position past 2:50pm CT. If they do not, they will be required to offset the position.

This is actually a point of differentiation for brokers. If day trade margin availability and limitations are important to you, you need to ask specifically.
 
bloomberg1 said:
what exact times ? Thanks

There is a time when you have to close the position to avoid a call
More...

Get out before 5 PM EST/4 PM CST. I always suggest to get out by 4.15 EST/3.15 CST
This is 15 minutes after the cash close.
 
Are brokers required to sell your positions of you are on a day trading rate at closing. Or is it optional? I have two accounts, one says that it's required to close day trading rates at 4pm on the button, the other seems to be willing to hold day trading margins indefinitely. Which is odd because then it's not really a day trade rate, it's just a normal margin rate . Right?

Example ..

You have $17,600 in cash in your account

You can afford to buy 1 Nq mini

With margin you can buy two.

You purchase 2 nq minis at 12pm.

If you don't sell by 4pm, what happens?

Is the broker required to sell your position to get back to full cash value? Or is it optional?
 
Csseattle said:
...the other seems to be willing to hold day trading margins indefinitely...
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Forever daytrading margins?!? Who is THAT broker? I'm in if they are based in the US!

Example ..

You have $17,600 in cash in your account

You can afford to buy 1 Nq mini

With margin you can buy two.

You purchase 2 nq minis at 12pm.

If you don't sell by 4pm, what happens?

Is the broker required to sell your position to get back to full cash value? Or is it optional?
More...

They are not REQUIRED to. They could have a yummy gummy relationship with you and loan you the extra 16K so you do not have to put up the extra collateral. But most likely, they would (if they were nice) sell off one of your positions if your NAV fell below the overnight margin requirement, or (if they were not nice), sell both your positions, and really screw you.
 
In my case... I thought they were selling one... And they held it for a 6 days. Before selling. I didn't mind riding the market with one contract... And thought they would sell one automatically at 4pm.lile my tradestation account would. Instead they did nothing... And then waited for the market to peak and sold both for a massive loss... I was able anticipating the market to go up/down anyway... and long over time... Which it has been... But they waited forever, then sold at the exact worst time. :(

I thought for sure they were required to sell... Otherwise it's just regular margin, not day trade margin. Seems really strange to have something called day trade rate listed from 8am to 4om and let it be held for 6 days.
 
Csseattle said:
In my case... I thought they were selling one... And they held it for a 6 days. Before selling. I didn't mind riding the market with one contract... And thought they would sell one automatically at 4pm.lile my tradestation account would. Instead they did nothing... And then waited for the market to peak and sold both for a massive loss... I was able anticipating the market to go up/down anyway... and long over time... Which it has been... But they waited forever, then sold at the exact worst time. :(

I thought for sure they were required to sell... Otherwise it's just regular margin, not day trade margin. Seems really strange to have something called day trade rate listed from 8am to 4om and let it be held for 6 days.
More...

Something I learned very early on is to always trade as if you are on full performance bond, and NOT use the day-trade leverage. This way you are least likely to get into trouble. Sure, you can't make a ton of money that way, but you are less likely to get a margin call that will wipe you out.

Because, well, you are not using margin outside of the PnL of the position.

You got 17.6K in the account? Then trade just the 1 contract, since the minimum bond is around 17.6K. Gives you a small buffer for your NAV if you are positive NAV in your position.

People get into trouble when they over-leverage and trade like the day-margins are sacrosanct. Trading 10 contracts in this environment is nutso anyway, regardless of the margins. The ranges are too extreme.

Who is your broker that would allow your position to be held 6 days, as you say?
 
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