I use OEC as a back up account for hedging and scapling against my core position and the low margins are helpful in that regard. I use IB as my main trading vehicle because it doesn't offer low margins and therefore less risk. One mitigating factor with OEC is that they only allowed the low intra day margin on the 1st 50 contracts, 51+ and margin requirements are substantially higher.
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Open E Cry raises ES margins from $500 to $2250
- Thread starter DerekD
- Start date
FYI - OEC margins back to 'normal'. Now everyone can breathe again.
http://www.openecry.com/traderstoolbox/margins.cfm
http://www.openecry.com/traderstoolbox/margins.cfm
Thanks for updating.
It appears that once the $vix pops into the 30's, both IB and OEC will suspend favorable intraday margins. IB was quicker about it this time than when they did it last in Sept '07. That one lasted for 6 weeks.
Might also have something to do with the credit crunch which started last summer. We'll see going forward when the $Vix spikes into the 30's again or doubles over the course of a month.
It appears that once the $vix pops into the 30's, both IB and OEC will suspend favorable intraday margins. IB was quicker about it this time than when they did it last in Sept '07. That one lasted for 6 weeks.
Might also have something to do with the credit crunch which started last summer. We'll see going forward when the $Vix spikes into the 30's again or doubles over the course of a month.
Quote from rcanfiel:
Where did you learn to trade, the bathroom? Catastrophic news does not leak out in a tidy manner.
Anyone sitting there with their account maxed to the hilt long with $500 eminis and thinking they can just zip out, will find everyone else is stampeding out the same exits.
$500 controlling approx $70,000 in a large scale way (many contracts) is called "looking for bankruptcy" in this modern inferno called 2008.
I agree with you. These things can happen and they do happen. Also add to the fact that exchanges go down because of tech problems, and you get these huge intra-day gaps sometimes.
With those guys speculating on a light margin, they are bound to topple over like a house of cards built up.
Anybody that thinks futures traders are less susceptible to this are deluding themselves, and are in for the biggest shock of their life when it happens to them.
In fact, most position traders can absorb these big gaps, as a days movement is just a days movement. It is clearly the intra-day trader using huge leverage (ie. futures but over-leveraged) who takes the greatest risk.
Quote from Bear Plunger:
I agree with you. These things can happen and they do happen. Also add to the fact that exchanges go down because of tech problems, and you get these huge intra-day gaps sometimes.
With those guys speculating on a light margin, they are bound to topple over like a house of cards built up.
Anybody that thinks futures traders are less susceptible to this are deluding themselves, and are in for the biggest shock of their life when it happens to them.
In fact, most position traders can absorb these big gaps, as a days movement is just a days movement. It is clearly the intra-day trader using huge leverage (ie. futures but over-leveraged) who takes the greatest risk.
Huge intraday gaps in the ES? You must be using bad data.
Huge intraday gaps are relegated to illiquid to relatively illiquid contracts. This is one of the reasons why almost invariably all sucessful daytraders trade highly liquid instruments.
$500 day trade margin means that the ES would have to go 10 full points, 40 ticks, against a daytrader. Since most daytraders go for ticks to a few points per trade, you're looking at a very improbable event. That's why such low margins are offered on highly liquid contracts like the ES. What is more, most houses that apply $500 margins will automatically liquidate all open positions should the net remaining open margin fall below $2000. And then they only let $500 margin on a maximum amount of contracts which usually tops out @ 50.