How to ramp up quickly? Trading 1000 lots with $100k margin

[Scataphagos]

well ok, usually initial margin is like 110%-130% or so of maintenance margin

so in this case, if the maintenance margin is $1, then initial margin is prob. $1.10-$1.30

or to use the other set of figures, if initial margin is $1500 per contract (actually pretty close to TradeStation's day trading rate on the ES), then maintenance would likely be around $1350

Not true.

Brokers wanting commish business will allow initial positions with $300-$500 equity for intraday trades. "Maintenace" margin is set by the exchange... currently $5800/contract... just now looked it up.

You have serious misconceptions and apparently need some education.

 

[GRULSTMRNN]

Nobody said that you have to exhaust your entire available margin. I could get 1000:1 but would still only trade a prudent position size. Available margin in itself is completely meaningless. It's how much of that available margin is being put at risk. Having said that, I agree that no brokerage or client should ever get away with more than 20:1 margin in ANY asset class or account or security.

Stupid to the max... both for the trader and for any broker who would allow. (That's how LTCM got into trouble and threatened the entire world's markets... a bunch of dumbass, academic PhD bond traders tried to get away with 100:1 leverage. How stupid can one get? With that kind of leverage, a 1% move against your position bankrupts you. How could anyone have such pompous hubris to think they could get away with that? 1%. 1 fucking percent! "Risk it all" with a 1% margin-for-error to bankruptcy"?. Are you nuts?)

Even if you're an experienced, expert trader (lots of hopefuls and wannabes, but not many EXPERT traders around, you know)... you probably shouldn't try to lever up beyond 50-lots with a $100K account. "Shit happens", in case you hadn't noticed.

 

[pinetboltz]

Not true.

Brokers wanting commish business will allow initial positions with $300-$500 equity for intraday trades. "Maintenace" margin is set by the exchange... more like $4500/contract.

You apparently need some education.

dude, how can maintenance margin be greater than initial margin?

 

[GRULSTMRNN]

And now with all due respect fuxx off and stop hijacking each and every thread you stumble across in your clumsiness. Goodness.

Gotcha! ON IGNORE!!

 

[Scataphagos]

dude, how can maintenance margin be greater than initial margin?

"Initial margin" is set by the exchange. Brokers may take the risk of allowing lesser margins in order to secure commission from traders on "intraday business"... and there is a risk to the brokers who do so... which they hope to manage so as to not get themselves into trouble.

"Maintenance margin" for overnight trades... is set by the exchange. Brokers have no control over that.

 

[GRULSTMRNN]

Ignore this guy, he is apparently some right winger nut who builds his anger in the politics forums. Obviously none of the brokers who (recklessly) ask for only 300 margins for ES contracts are charging pass-through maintenance margins that exchanges demand. Such brokers put up the maintenance margin on their own at their firms risk. The entire idea of such bucket shops is to entice newbies to trade with small account sizes. Hence they would not be able to even hold on to such low hanging fruits if they charged 4k maintenance margins.

dude, how can maintenance margin be greater than initial margin?

 

[schweiz]

I understand, agree, and also operate with this viewpoint. But margin and account value are separate things.

Correct, they have a different definition. But in the example from OP the value of the margin he speaks about is complete nonsense. What he calls the margin (100K for 1,000 lots) is not the margin as he cannot trade with that margin.
Margin is the amount you need to trade a lot. It is clear that with $100 margin you cannot trade anything.

 

[GRULSTMRNN]

Wrong again. Initial and maintenance margins that exchanges require have to be met by the exchanges clearing members. Most all clearing members pass that margin requirement through to their clients, broker dealers. What broker dealers demand from their clients in terms of margin requirement is up to the broker. All this is in the context of day trades, trades that are closed before the trading session ends. You don't seem to have a clue how margins work.

"Initial margin" is set by the exchange. Brokers may take the risk of allowing lesser margins in order to secure commission from traders on "intraday business"... and there is a risk to the brokers who do so... which they hope to manage so as to not get themselves into trouble.

"Maintenance margin" for overnight trades... is set by the exchange. Brokers have no control over that.

 

[pinetboltz]

"Initial margin" is set by the exchange. Brokers may take the risk of allowing lesser margins in order to secure commission from traders on "intraday business"... and there is a risk to the brokers who do so... which they hope to manage so as to not get themselves into trouble.

"Maintenance margin" for overnight trades... is set by the exchange. Brokers have no control over that.

ok, you mean the switchover from day margins to overnight rates, where overnight maintenance margin > day initial margin

eg. Tradestation's rates on the ES:
Day initial margin: $1595
Day maintenance margin: $1450

Overnight initial margin: $6380
Overnight maintenance margin: $5800

 

[Scataphagos]

ok, you mean the switchover from day margins to overnight rates, where overnight maintenance margin > day initial margin

eg. Tradestation's rates on the ES:
Day initial margin: $1595
Day maintenance margin: $1450

Overnight initial margin: $6380
Overnight maintenance margin: $5800

Yes, the broker can set whatever margin requirements he wants for intraday plays... but he's somewhat on the hook if things go awry. He plays that game... a calculated risk... that doing so is worth it to him in commish business.

But to hold a position overnight, a trader must post the exchange maintenance margin... currently $5800/contract. Broker has no control over that.... which is why "low margin traders" must go flat ~ 5 minutes before the close.