How much will be my maximal loss on a $2600 IB futures account

Originally posted by Banjo
German brokers must have some other safegaurds in place. That's one hell of a risk factor unless I'm missing something.
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The rule is a rudiment of former law in Germany, up to the
70s-80s futures / options on fut. were completely forbidden
by the authority, they were considered as gambling, therefore
any such arrangement by a private person was void.

If a sudden drop in the SP of say, 400 pts would happen
(e.g. nuclear attack, real. war, etc), the situation in the
US would probably be solved like this:

All the margin / cash the LONG-Guys have is taken from them
and given to the shorts, the LONG's minus-amounts surpassing
that will be "waived", the shorties cannot get all the money
they should get. Futures are still gambling - high level gambling.

However, i do not know if such a thing ever happened...
 
If that were the case, no one would accept a German account to trade futures.

To answer the original question: When you trade futures or short options you can lose all or more than the money in your account. If your account sustains a debit, you will be responsible for the full amount of the debit.

You can lose your house, and this type of trading is not suitable for anyone who doesn't fully understand the risks. Adverse market events happen all the time and can strike out of the blue. If you are concerned about maximum loss, futures trading should be avoided as there is no maximum.

If you trade with a deep discounter such as IB, it is almost imperative that you have a second account so that you can enter or exit the market in a timely fashion in case of network/communication/etc. failure.
 
"2600 is not enough for the initial performance bond for one NQ, you need about 4000 for that. 2600 might be enough for maintanence though."

I don't believe these numbers apply to daytrading the nq with a firm that offers daytrading margins.

I think you are right, but if you had 15,000 in the account and traded only one contract, I don't know that the $2,600 makes much difference.

I don't do a whole lot of nasdaq, but 5 points is an awfully tight stop. I think you would get stopped out on some good positions.
 
This is an issue that I feel is a big achilles heal for the industry and probably, on more than one occassion, has caused some uninformed traders to really blow out, plus owe a big debt to the clearing firm...My feeling is that the short term scalpers who are leveraging a 10-20k account with 1k intra-day margins are really putting the pedal to the medal...Typically, anyone who has traded long enough is either just fronting a small amount in their futures account with a good amount of backup or is not going to even touch those absurdly low intra-day margin rates...When I hear of traders doing 20-30 lots, I assume that they have six figure accounts, but it seems that many of these traders are maxing out their margin...That is a real risky game in this day and age when the increasing number of surprise Fed announcements, news sensitive price shocks and technical glitches basically make a 20 pt spike a liquidation sale...

The real security is in knowing that even if the worst case scenario occurs and the market spikes 20-30 handles in a heartbeat that u will still survive...WIthout that security trading takes on an unreal level of stress and emotion...
 
Originally posted by Sunfair
Vulture,

Probably a typo, but if not, the expression is "pedal to the metal" (metal = floorboard of car).
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No, I think Vulture is talking about all of those medals that
are worn by the athletes that just competed in the Olympics...
It was "pedal" that was the typo. He really meant "petal" as in
"petals of flowers". So you see, you just put flowers all over
the medals won by the athletes in the Olympics. See?

Oh hell, I've been trading too long....

:D
 
Originally posted by stevet
using maximum leverage is how you make money - using it badly is how you lose money
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I would say that using maximum leverage is how you transform your risk of ruin to a near certainty over the long run, therefore it would be using it badly and would be how you lose money.

size kills
 
TriPack: agree 100% -
if you trade not for long yet it is even better to trade
100 QQQs in + out than to enforce a "whole" NQ contract.
The pressure a maximized position using ultra-low
intraday margin builds will probably more than you can bear...
stay rational
 
maximum leverage - is the amount that a trader might choose to use at anyone time - it is not a set figure


so as examples

maximum leverage before any known news which could move the markets substantially should be zero

and on a day when there has been only good news and the futures and cash show continuing continuing strength, with no breakdown in the rising market and only whilst that lack of breakdown continues - should be 100%
 
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