I didn't know you could do that. Are you saying that one can have an account with one broker and trade through another broker? How does this work? I never heard of such a thing.
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Question on over-night margin requirements
- Thread starter Teleologist
- Start date
Quote from 50 cent:
nothing could be further from the truth. the broker needs to answer to the exchange's margin requirements, however it can require its clients to have any margin that the broker chooses, either lower or higher than the exchange's requirements. IB's margin requirements are lower than the exchange's requirements. Global Futures for example, require margin as low as $300 per contract for ES/NQ/YM. theoretically each broker can require different margins and can choose different times of the day for switching to overnight margin. you just have to shop around.
50 - so are you saying that if the CME sets the overnight at a price level a broker can willingly go below that for their clients? If so, I was not aware of that. Seems like that could cause some issues for someone at the brokerage firm or client. In the end the margin has to be made up somewhere, right? So if the broker allows a client to go below the exchange margins the broker must be making up the difference? Hopefully that broker knows what they are doing.
It's not that they "take care" of the difference.
The way I understand it is this - the reporting for margin compliance is based on the position of the accounts at the market close. So technically, only at the market close does your broker need to "show" the exchange that the customer has the correct margin to hold the position.
This is why the exchange doesn't "know" anything about day margin or overnight margin. Margin is margin to them.
Notice that your brokers overnight margin is the same as the published SPAN (from the CME) margin - because this is what the CME tecnically requires.
Since your broker doesn't need to report position intraday - it can decide to require any margin it wants. Thus "daytrading" margins.
The way I understand it is this - the reporting for margin compliance is based on the position of the accounts at the market close. So technically, only at the market close does your broker need to "show" the exchange that the customer has the correct margin to hold the position.
This is why the exchange doesn't "know" anything about day margin or overnight margin. Margin is margin to them.
Notice that your brokers overnight margin is the same as the published SPAN (from the CME) margin - because this is what the CME tecnically requires.
Since your broker doesn't need to report position intraday - it can decide to require any margin it wants. Thus "daytrading" margins.
Quote from 50 cent:
that's correct, broker takes responsibility for the rest of the margin. you have brokers offering $300 and $500 margins, way below exchange requirements.
$300-$500 on OVERNIGHT margins? I've never heard of that. I realize daytrading margins are like that, but the original question was about overnight margins.
50 Cent, I'm still waiting for an explanation of how you can have an account with one broker and trade through another broker. Like you, I trade through IB but I don't like IB's margin requirements. If I understand you correctly, you are trading through IB and at the same time are getting Global's $300 day trading margin. If this is in fact what you are doing I would appreciate you telling me how one goes about setting up such an arrangement.
Quah wrote:
Does that mean that brokers are under no rule from the exchange to require over-night margin for future trades entered 3 minutes before the market opens?
The way I understand it is this - the reporting for margin compliance is based on the position of the accounts at the market close. So technically, only at the market close does your broker need to "show" the exchange that the customer has the correct margin to hold the position.
Does that mean that brokers are under no rule from the exchange to require over-night margin for future trades entered 3 minutes before the market opens?
Quote from brownsfan019:
$300-$500 on OVERNIGHT margins? I've never heard of that. I realize daytrading margins are like that, but the original question was about overnight margins.
i will try to check this for you after trading hours. i will enter an order for the maximum number of contracts my account balance allows assuming $300 margins and see if it gets accepted or rejected. will let you know. best thing that you can do though, is contact global and ask them about it directly.
50 cent,
I went to the Global website an hour ago and their over-night margin for the ES is $3,900. I would be interesred to see what would happen if you did your experiment 3 minutes before the market opens tommorow.
I went to the Global website an hour ago and their over-night margin for the ES is $3,900. I would be interesred to see what would happen if you did your experiment 3 minutes before the market opens tommorow.
<b>Tele</b>, please contact the futures broker I use... Eliot at www.mirusfutures.com
Day trade margin is a lot less than IB, if that matters. You might find it extends to pre-9:30am if you explain the process to him.
BTW... no affiliation other than I clear thru Mirus, this is purely one trader's suggestion to another :>)
Day trade margin is a lot less than IB, if that matters. You might find it extends to pre-9:30am if you explain the process to him.
BTW... no affiliation other than I clear thru Mirus, this is purely one trader's suggestion to another :>)