Interactive Brokers intraday requirements for ES

[SteveH]

Keep in mind no one has ever lost money in a US regulated futures account. In the rare case of a broker failure you may have to wait until the dust settles to get all your funds; so for some, there might be an opportunity cost.

The Corzine case should be enough to scare anyone from keeping large sums collecting in a futures account. Reading the article below doesn't convince me that this was all on the up and up. As the saying goes, Corzine probably knew where too many bodies were buried so "the lost funds" miraculously became unlost.

The smart thing to do with a low margin futures brokers is to sweep your profits out on a regular basis.


http://fortune.com/2013/11/15/how-mf-globals-missing-1-5-billion-was-lost-and-found/

 

[Xela]

The smart thing to do with a low margin futures brokers is to sweep your profits out on a regular basis.

This may be so ... but the smarter thing is perhaps simply to avoid trading with low-margin futures brokers: the people who "have to" actually don't have to at all - they're undercapitalized, but typically they "choose to think of it differently", which is partly why they have the problem ...

 

[Handle123]

This may be so ... but the smarter thing is perhaps simply to avoid trading with low-margin futures brokers: the people who "have to" actually don't have to at all - they're undercapitalized, but typically they "choose to think of it differently", which is partly why they have the problem ...

I agree, I have always felt uncomfortable when a broker I was using lowered their margins as this put me at risk more on someone else. If you stay in trading long enough, your leverage changes, like for one ES, I will use $5,000 as my personal margin, cause it a matter of when another horrible occurrence and if I was long, in 1-2 weeks when they reopen I know I will lose $4,000 per lot, whereas underfunded traders either go to bank or file bankruptcy but broker going to have to make good.

 

[schweiz]

This may be so ... but the smarter thing is perhaps simply to avoid trading with low-margin futures brokers: the people who "have to" actually don't have to at all - they're undercapitalized, but typically they "choose to think of it differently", which is partly why they have the problem ...

I traded many years ago with REFCO. Not exactly a low-margin broker. We all know what happened with REFCO and so also with my account...

After that I went to low-margin brokers as there I did not needed to deposit so much money. I daytrade now ES with a margin of around ù a contract. I can however use a much bigger margin if I wish. So if I would have a drawdown I could use the same position to recover. This is good for me as I will not have the problem of having to make % return to recover a % loss.
I do however put money in a normal bankaccount just in case... So actually my leverage is much smaller if you add up the broker account and the bank account. But my risk of losing money in case something goes wrong with the broker is much smaller.
Since I use that system I never had to wire transfer money to my broker.

My real margin is equal to my brokerage account + my bankaccount as backup.

If my low-margin broker goes broke I will lose some money, but in the last 10 years that did not happen, and so the extra return of these +10 years thanks to lower margins have already largely passed the potential loss I can have.

Every month there is a publication showing all the obligations of all brokers in the US. So as long as they don't cheat you can see how big the risk is. Problem is that in hindsight we alway see the publications were not correct because the brokers in difficulties will use create bookkeeping to hide it's problem.