RIP Thinkorswim
- Thread starter Eliot Hosewater
- Start date
An 80 handle range could easily have been 100 or 120 or 150, that's kind of the point. If Soc Gen or Paribas collapsed last week do you think a $5k margin would have been sufficient?
It wasn't arbitrary, it was in response to market conditions, to protect everyone involved. As to whether it was a suprise move, that's another story.
I doubt that, business is business. The idea of offering the full spectrum of products on one platform seems like it would make sense to them. I just think they want to be more conservative.
FWIW, my account rep called me a couple months ago for some reason, and after he heard I used another firm for futures he actively tried to get my business. You'd think if they didnt want futures business they would send out a memo or something.
Well as a former risk manager who has spent a significant amount of time analyzing the mathematics behind futures margins, I will simply agree to disagree with you. Simple question, if the CME is so stupid and so wrong as you say they are, then why is TOS the one and only firm raising the ES to 6500 and CL to 12000?
If all the other firms jumped off the bridge should TOS/AMTD? Like I said, maybe they are just trying to be conservative.
Lower margins = more business. So firms have little incentive to raise them, including the CME. Look no further than the $400 (maybe $300 now?) intra-day margins being offered on ES by some FCMs.
look at GC; sure all the standard risk/volatility metrics have jumped but $7500 for a $175k contract? Seriously? It could easily be up or down 200 by the close tomorrow. Hell, it could gap up 100 if something crazy came out of europe. (is there even a limit in gold anymore? either way it doesnt matter)
Maybe my distaste for quantitative risk management is the problem. I just don't think you can succesfully model future risk, in any meaningful way. Its a subjective thing to me.
Is there a quality firm dedicated to futures and futures options that has all the option analytics of a TOS like platform?
As far as futures margin goes, you are right that anything can happen but you have to do it quantitatively for it to be done realistically. The other thing to keep in mind is you are really only talking about gaps, and basically unheard of ones at that. Take ES for example. The CME margin is 100 points but the maintenance is 80 points. That means the system/risk manager is liquidating your positions when you still have $4000 per contract left in your account. What is the chance that the market moves 80 points before the risk manager has time to hit the sell button for you?
Since TOS is free through AMTD you can setup two accounts. Transfer your 401k to AMTD and setup another futures account.
As to the latter point, pretty much everyone I know trades through an FCM that offers intra-day margins, so risk managers have a lot less than 80-points of margin, more like 8-10 now. I guess that's not really the CMEs fault though.