Hey everyone!
Something tells me I'm wrong here, would appreciate clarity:
Lean Hogs contract: 40,000 pounds per contract
Price is dollars and cents per pound
Current trading price is 76.7. So the notional value is approximately $3 Million.
According to the CME, the initial margin is $1,300.
$1,300 to control $3 Million in notional value? 2,360x leverage?
Something isn't right (most likely I've misunderstood something here - can't see how you can make money at 2360x leverage; a .0433% move against you will wipe out your margin)
Something tells me I'm wrong here, would appreciate clarity:
Lean Hogs contract: 40,000 pounds per contract
Price is dollars and cents per pound
Current trading price is 76.7. So the notional value is approximately $3 Million.
According to the CME, the initial margin is $1,300.
$1,300 to control $3 Million in notional value? 2,360x leverage?
Something isn't right (most likely I've misunderstood something here - can't see how you can make money at 2360x leverage; a .0433% move against you will wipe out your margin)
