how do i calculate the margin i will need

M

met1989

hello

i have been trading for over 3 years on a DEMO account now i feel confident to start trading the problem is i cant figure out how much margin i will need in order to trade in my strategy as futures are always the same margin requirments but options change with market volatility now i don't mind putting in allot of money in order not to get a margin call but still how would u guys do it?
 
Calculate your liquidity in the worse case scenario then add 100%. So if your worse draw down is 10% likely your lying to yourself and it's more like 30%. So you need to use 40% of your total account size on margin or less.. plus it totally depends on your strategy.. are you holding over night. Trading spreads... Etc,.
 
cdcaveman said:
Calculate your liquidity in the worse case scenario then add 100%. So if your worse draw down is 10% likely your lying to yourself and it's more like 30%. So you need to use 40% of your total account size on margin or less.. plus it totally depends on your strategy.. are you holding over night. Trading spreads... Etc,.
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that i can i do but lets say last week the options prices were expensive so i wouldn't be able to trade
 
met1989 said:
hello

i have been trading for over 3 years on a DEMO account now i feel confident to start trading the problem is i cant figure out how much margin i will need in order to trade in my strategy as futures are always the same margin requirements but options change with market volatility now i don't mind putting in allot of money in order not to get a margin call but still how would u guys do it?
More...

First, you have to decide the whether you are a day trader or position trader. Each FCM holds it's own day trading policies. If you keep positions overnight, you just need to see what are the margins that are dictated by the exchanges. If you Google for example "Emini SP Margin" the first on-paid choice will most likely be the link that you need. The CME lists the maintenance margin, so to get the initial you need to multiply by 1.1.
 
MattZ said:
First, you have to decide the whether you are a day trader or position trader. Each FCM holds it's own day trading policies. If you keep positions overnight, you just need to see what are the margins that are dictated by the exchanges. If you Google for example "Emini SP Margin" the first on-paid choice will most likely be the link that you need. The CME lists the maintenance margin, so to get the initial you need to multiply by 1.1.
More...
but if i have a long future and its protected with a put do i still need that maintain margin?
 
Theoretically, the long option value should subtract from the margin requirements, but each FCM has its own risk parameters to calculate that so you would need to talk to your futures broker and run the specific scenario. This is my suggestion.
 
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