Margin Requirements

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pcgeek86

Hey, I'm interested in trading the Dow E-mini, although I need some help understanding how the margin requirements work. IB says that the intraday initial margin is $1219, and intraday maintenance margin is $975. Does this mean that they subtract $1219 from my account when I purchase a contract, and I must maintain $975 cash in my account until I sell it? I just want to make sure I understand these terms right.

Also, if my account is not a margin account, can I still trade futures under these margin regulations?
 
Quote from pcgeek86:

Hey, I'm interested in trading the Dow E-mini, although I need some help understanding how the margin requirements work. IB says that the intraday initial margin is $1219, and intraday maintenance margin is $975. Does this mean that they subtract $1219 from my account when I purchase a contract, and I must maintain $975 cash in my account until I sell it? I just want to make sure I understand these terms right.

Also, if my account is not a margin account, can I still trade futures under these margin regulations?
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It means you must have the initial margin amount in your account - it is not taken from your account. Then you must have the maintenance amount to keep the trade open. If you fall below the maintenance amount IB will automatically close the trade for you. The other thing to be aware of it the minimum account value to open a futures trade, currently 2000, I think. So the initial is of value if you trade multiple contracts or multiple markets.

To trade the futures you must have the permissions, but it does not need to be a margin account.

Make 'em pretty, Chris
 
Intraday margins depend on the firm; at the settlement time you must have the exchange amount. i heard that some firms charge you if you don't have enough margin or they liquidate. The place i trade at the day margin is $500 on e-mini's.
 
What the hell?

Maybe I don't know my terminology exactly, but I do know that cash accounts can trade futures ... look at the description of it under Account Management.

Aimee: Hello, this is Aimee. How may I help you?
me: hi Aimee .. I am attempting to add the futures trading permission to my account, but have been having some trouble
me: I am getting an error stating that I must be 21 years of age, even when I now uncheck the futures checkbox to enable only stocks & options
Aimee: checking
me: someone from the European support staff told me that there was a request for a margin account pending, although I realize that I do not qualify based on age. I would like to set up a cash account with futures trading permissions, please.
me: Thank you
me: I placed a call into the USA IB support staff this morning, and someone told me that there is an age limit to trade on the CBOT, however I believe this age requirement is only for floor traders, after some research
Aimee: You can not have futures trading permissions if you are under 21
Aimee: The upgrade request for margin, futures and future options will be rejected by our compliance deparment.
Aimee: This is the manner in which our system is programmed
Aimee: and unfortunately we cannot over ride that.
me: What about cash margin? As long as I maintain the proper amount of maintenance margin, I ought to be able to trade futures in a cash account, no?
Aimee: there is no such thing as a cash margin
Aimee: account type
Aimee: Do you have any other questions?
me: the description of the cash account includes a provision for trading futures though
Aimee: If you are under 21 years of age, you can not have futures or margin trading permissions
Aimee: assigned to your account.
Aimee: This is how our system is programmed.
me: Is IB the cause of this limitation? or the exchange?
Aimee: If you are under 21 years of age, you can not have futures or margin trading permissions assigned to your account. This is how our system is programmed.
me: yes, I understand that now, but I'm trying to figure out what the source of the issue is. The exchange does not have rules against people under 21 to trade futures on it, does it?
Aimee: Our compliance department holds all requirements for account approvals strictly in confidence.
Aimee: If you want more information on what an exchange requires, you may contact that exchange. However, please note
Aimee: that any broker may be stricter than exchange policy, if they wish.
Aimee: It is up to each individual broker on what types of accounts they will or will not accept.
me: well, okay, that'll be all. Thanks for the info ......
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