Newbie questions (leverage & perfomance bond)

B

Bronce

Hi guys,

Wanna ask a few questions related to leverage and margins...

Is there a limit on the amout of leverage that can be undertaken when opening a position?
I am in process of research on futures, and havn't yet found any information about maximum leverage allowed on CFTC website. (I guess there is no limits imposed because it is a hedger's instrument but I dont know yet...)
So, as I see it so far - the only boundary on leverage is the margin call... Is this the way it works?

i.e. one can undertake 'unlimitedly' large position relative to his/her account size. He/she is out of the game if market goes against. If market goes in favor - it's ok.

Is it the way it is?

Thank you
 
The final margin requirements are set by the broker. For example, I can buy 1 YM contract for each $1300 in my account with Interactive Brokers, but with Infinity Brokerage I only need $600 in my account by trade one Dow contract.

Also--Most have a daily loss limit. If your trade goes against you too much they may liquidate your position for you. This has happened to me once.

Do you have a futures broker yet?

CajunSniper / Puretick.com Administrator-Trader
 
Hi Spectra,

Quote from Spectra:

The final margin requirements are set by the broker. For example, I can buy 1 YM contract for each $1300 in my account with Interactive Brokers, but with Infinity Brokerage I only need $600 in my account by trade one Dow contract.
More...


margins are set as per contract or am getting you wrong?

for example, if a broker has initial margin for ES equal $3500, then in order to be able to trade 1ES contract I must have $3500 in my account. And to trade 100ES contracts I must have $350000?

no, no broker yet...

(was considering Cybertrader for index e-minis but Schwab decided that this firm had to evolve back into the 'cave-man' times. And just about the same time IB went nuts IPOing. Guess that's going to be my choice.)
 
You must log in or register to reply here.
Back
Top