New ES Margin from CME

[PetaDollar]

Quote from spyderman:

those are the overnight margins....intra day went up but not as bad:

es 2000/1600

nq 1875/1500

Note, the intraday margin is up to the broker.

 

[chinook]

Quote from Pabst:

The increased margins at the CME are in response to higher index values as well as the reality that renewed domestic terror could break the markets 5-10% overnight. You should know that some traders sold the market merely because of futures margins being raised today!

Tradestation and many other firms offer cheaper than 50% daytrading margins. There is clearly a disconnect between the fear of a huge overnight gap and the normal narrow range chop of the indices. While overnight margins are mandated by CME Clearing, daytrade margins are purely discretionary on behalf of the member firms.

Pabst,

I'm just curious. Could you please explain why people would short the market because of higher futures margins?

Thanks,

Chinook

 

[Pabst]

Quote from chinook:



Pabst,

I'm just curious. Could you please explain why people would short the market because of higher futures margins?

Thanks,

Chinook

Bears were called to arms by the CME's margin increases for the following reasons. The possibility that Federal agencies had notified the Merc of a plausibly imminent terror incident. Worries that the NYSE had disclosed a large selling imbalance from Friday afternoon that may spill over into todays trade. The reality that weak longs from last week may face liquidation from higher maintance requirements and/or the higher margins would dilute the purchasing power of new market buyers.

 

[chinook]

Quote from MichaelD:

Please note that TradeStation has new lower $1000 Day-Trading Margins for E-Mini S&P, E-Mini NASDAQ and Mini-Dow.

Also, the TradeStation commissions for all electronically traded U.S. futures, including E-Minis, are now just $2.50 per side, per contract, when traded through the TradeStation 7 platform. In addition, we offer a special pricing plan for CME and CBOT exchange members.

For additional information please call 800-808-9336 .

MichaelD,

If Tradestation wants to be a direct competitor to IB as a broker for e-mini futures, your company should implement the following ASAP:

1) various order types such as OCA, bracket, trailing etc..
2) order entry API so people can easily enter/exit/scale in/scale out of their positions with couple of clicks.

Chinook

 

[ElectricSavant]

Quote from Pabst:

The increased margins at the CME are in response to higher index values as well as the reality that renewed domestic terror could break the markets 5-10% overnight. You should know that some traders sold the market merely because of futures margins being raised today!

Tradestation and many other firms offer cheaper than 50% daytrading margins. There is clearly a disconnect between the fear of a huge overnight gap and the normal narrow range chop of the indices. While overnight margins are mandated by CME Clearing, daytrade margins are purely discretionary on behalf of the member firms.

The margin is from session to session not necessarily overnight.

RTH=8:30-15:15cst

Michael B.

 

[Pabst]

Quote from ElectricSavant:




The margin is from session to session not necessarily overnight.

RTH=8:30-15:15cst

Michael B.

Huh? The accepted term for what you label as "session to session" is OVERNIGHT.No matter where in the world you are, sometime during those 17 hours of RTH closure here in Chicago, it's night time. By your way of reckoning there's no such term as "daytrade margins" since after all it's night in Asia when ES is trading RTH here!

 

[chinook]

Quote from Pabst:



Bears were called to arms by the CME's margin increases for the following reasons. The possibility that Federal agencies had notified the Merc of a plausibly imminent terror incident. Worries that the NYSE had disclosed a large selling imbalance from Friday afternoon that may spill over into todays trade. The reality that weak longs from last week may face liquidation from higher maintance requirements and/or the higher margins would dilute the purchasing power of new market buyers.

Pabst,

Thanks for the explanation. It seems possible that timing of the terror threat, bounce from the index highs and new higher margins can actually create a "technical dip".

Chinook

 

[ElectricSavant]

Quote from Pabst:



Huh? The accepted term for what you label as "session to session" is OVERNIGHT.No matter where in the world you are, sometime during those 17 hours of RTH closure here in Chicago, it's night time. By your way of reckoning there's no such term as "daytrade margins" since after all it's night in Asia when ES is trading RTH here!

Some Brokerages who do not man overnight desks do not observe a daytrade being a round turn trade that remains in its session. Some Brokerages simply offer the daytrade margin during RTH.

Michael B.

 

[ktm]

Quote from Pabst:

Bears were called to arms by the CME's margin increases for the following reasons. The possibility that Federal agencies had notified the Merc of a plausibly imminent terror incident. Worries that the NYSE had disclosed a large selling imbalance from Friday afternoon that may spill over into todays trade. The reality that weak longs from last week may face liquidation from higher maintance requirements and/or the higher margins would dilute the purchasing power of new market buyers.

It should be noted that the above is mere speculation on your part and in no way based on any facts.

The latest wave of terrorism, the alleged "large selling imbalance from Friday that was going to spill over" all took place AFTER the memo was written last Monday, November 10th.

It's certainly good entertainment to speculate about all the conspiracies that might exist for such a move.

I would agree that some CPOs who maintain strict margin/equity ratios may have trimmed index derivative positions, either Friday or yesterday - to maintain their balance and stay within their own guidelines. That effect should have been nominal. Other speculators who were much closer to being fully margined may have received notices, margin calls or may have been liquidated if the new requirements caused them to exceed maintenance.

 

[Tea]

I'm picturing an exchange official who has an epiphany during his afternoon nap causing him to raise his head from his desk and shout - "Good God, I am first noticing that we have a terrorism problem in this country - raise the margin rates!"

Or perhaps someone at the CFTC got spooked with all the scandals at the NYSE and mutual funds and suggested raising margin. Hmmmm.