Temporary futures day margins increase

[tiddlywinks]

Received this message from a broker platform.

Honestly, this broker/fcm has pushed this to far. They promote reduced day-margins but whenever there is the slightest increase in volatility, they bump the day margins.

I say they can not have it both ways, either they have reduced day margins during all levels of volatility or they don't. Sure, there are extreme situations, in which case it is fully understandable. However, thus far, this is the only firm I am aware of that has already spoken due to the election. This particular increase in US Index day margins as written, represents a 400% increase, effective at the close today, until basically unknown. Frankly, I've had enough of these guys. Either they offer day margins or they don't.

 

[algofy]

Received this message from a broker platform.

Honestly, this broker/fcm has pushed this to far. They promote reduced day-margins but whenever there is the slightest increase in volatility, they bump the day margins.

I say they can not have it both ways, either they have reduced day margins during all levels of volatility or they don't. Sure, there are extreme situations, in which case it is fully understandable. However, thus far, this is the only firm I am aware of that has already spoken due to the election. This particular increase in US Index day margins as written, represents a 400% increase, effective at the close today, until basically unknown. Frankly, I've had enough of these guys. Either they offer day margins or they don't.

When was the last time they increased margins? Brexit?

 

[tiddlywinks]

When was the last time they increased margins? Brexit?

Yup. And day margins went to 100% 2 full trade days before the BRExit vote! Every other broker offering day margin raised as well, but much closer to the day of the vote. Additionally, this firm was one of, if not THE, last to revert which was days later, well after the vote.

Actually, this is (now) a backup account for me, but I think it is time to close this account completely, and go elsewhere for backup.

 

[Zzzz1]

makes complete sense, so that guys like you do not break another broker. But you are right, they should probably raise their margin levels in general. Someone whose business depends on artificially low margins should not be in this business in the first place. Its protecting people like you from yourself. You should be thankful.

Yup. And day margins went to 100% 2 full trade days before the BRExit vote! Every other broker offering day margin raised as well, but much closer to the day of the vote. Additionally, this firm was one of, if not THE, last to revert which was days later, well after the vote.

Actually, this is (now) a backup account for me, but I think it is time to close this account completely, and go elsewhere for backup.

 

[algofy]

Yup. And day margins went to 100% 2 full trade days before the BRExit vote! Every other broker offering day margin raised as well, but much closer to the day of the vote. Additionally, this firm was one of, if not THE, last to revert which was days later, well after the vote.

Actually, this is (now) a backup account for me, but I think it is time to close this account completely, and go elsewhere for backup.

Yes agree, if you don't like what they are doing, it's prob time for you to go somewhere else. I can't hardly fault the broker though, because they are ultimately responsible for all trades.

 

[tiddlywinks]

makes complete sense, so that guys like you do not break another broker. But you are right, they should probably raise their margin levels in general. Someone whose business depends on artificially low margins should not be in this business in the first place. Its protecting people like you from yourself. You should be thankful.

Yea, me and all day traders like me, the evil speculators. We break brokerages, that's what we do! LOL. BTW, polling stations are open... go make your opinions known there, if it's legal for you to do so.

 

[tiddlywinks]

Just received this from one of my main brokerage/fcms. That's good. It shows the backup brokerage is not acting as a lone wolf.

---------------------------------------------------------------------
Temporary Margins Increase – US Overnight Session – starting Tuesday 11.8.2016 at 4pm CST

Due to possibility of extreme volatility from the US Presidential Election, starting at Tuesday 11.8.2016 at 4pm CST we will be setting the margins at double our current Day Trade Margins.

This will be in effect until Wednesday 11.9.2016 at 8am CST – back to normal day trade margins for the US trading session.

For example, our standard day trade margins for ES is $400 per contract > during tonight’s overnight session ES will be $800 per contract.

This will be applied across all markets and all trading platforms.

Exception – Mexican Peso trading will be disabled until Wednesday 11.9.2016 at 8am CST.

Please view our current Day Trade Margins X 2 (double) for the amount required for each contract during this temporary increase.
------------------------------------------------------------------------------

I also note the terminology of the messages. One is clearly more "nervous", imo.

 

[Zzzz1]

Incredible. Thats still 1/4th of what my broker charges in initial margin for ES. Why do you need such low margin requirements? It only encourages over-leveraging.

Just received this from one of my main brokerage/fcms. That's good. It shows the backup brokerage is not acting as a lone wolf.

---------------------------------------------------------------------
Temporary Margins Increase – US Overnight Session – starting Tuesday 11.8.2016 at 4pm CST

Due to possibility of extreme volatility from the US Presidential Election, starting at Tuesday 11.8.2016 at 4pm CST we will be setting the margins at double our current Day Trade Margins.

This will be in effect until Wednesday 11.9.2016 at 8am CST – back to normal day trade margins for the US trading session.

For example, our standard day trade margins for ES is $400 per contract > during tonight’s overnight session ES will be $800 per contract.

This will be applied across all markets and all trading platforms.

Exception – Mexican Peso trading will be disabled until Wednesday 11.9.2016 at 8am CST.

Please view our current Day Trade Margins X 2 (double) for the amount required for each contract during this temporary increase.
------------------------------------------------------------------------------

I also note the terminology of the messages. One is clearly more "nervous", imo.

 

[tiddlywinks]

Incredible. Thats still 1/4th of what my broker charges in initial margin for ES. Why do you need such low margin requirements? It only encourages over-leveraging.

Firstly, understand day margins are only valid for flat-at-the-end-of-day trading. No swings. Once the market closes at 4pm EST, any held positions will require full initial exchange minimum (or higher, depending on brokerage/fcm) margins. So that should tell you quite a bit of how myself, and many others trade.

As to why... Why not? It doesn't mean we go all-in on every trade, but it gives us flexibility for deployment of capital and instruments to trade, as well as allowing us to lose or make meaningful amounts, if that's something we thrive or strive to do.

 

[Overnight]

Then just don't trade for a couple of days? What is the big whoop? Take a break. Come back when the market returns to "normalcy".

Eeesh