This Crazy Margin Call!

I checked out the Alaron website and it lists the initial margin for the Dow e-mini at $2,438. I'm going to use that base number as their minimum requirement for holding overnight, so:

2 x $2,438 = $4,876 for holding 2 Dow e-mini contracts overnight/over the weekend.

I'd give Alaron a call and liquidate the positions if possible. After that I wouldn't hold overnight (and most definitely not over the weekend) until I have a better handle on things.
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The market can do what is know as GAPPING, in the process blowing past your protective stops like they weren't even there (particuarly for an account this size).


JJ
 
Quote from TradingBillions:

but what does that mean ANDY? I owe them 2500 ?!? Im soo lost! Ive never done this before so im confused. I have two contacts, so thats 2500 per contract? Now I owe them 5000?
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You really should sell at the market first thing Monday morning and then educate yourself before trading any further. If you do not understand margin, then you really have no business trading at this point.

A surgeon do not walk into surgery and then ask what this scalpel thing is for.

-S
 
Quote from sevensa:

A surgeon do not walk into surgery and then ask what this scalpel thing is for.

-S
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Here's the most likely scenario for Monday's action.

Now if it doesn't happen, don't blame me, I'm just looking at my charts, looking at what has happened in these situations 7 or 8 times out of 10, and drawing my conclusions.
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The market has experience goood accumulation with a serious ramp-up, it's been trading around in a channel the past few days and, it will most likely do a re-test of the highs on Monday and begin the process of getting ready for distribution.

So you should be OK for now.

Just chalk this one up as another lesson learned and move on to the next trade.

Regards,

JJ
 

Attachments

Quote from TradingBillions:
btw how am i "overtrading"??
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One YM mini contract moves roughly 65k give or take a few. So with your 2k you are now juggling with two units of a derivative that have a combined underlying valued at 130k. Profits and losses gets applied both in positive and negative direction 1:1 to your 2k account.

On other words: With a minimal move (~2%) of the underlying you can be wiped out completely... or... you could double your account. Hence the casino reference.
 
Seriously TradingBillions, try to cover your futures Monday as soon as you can and go back to the drawing board. This is just friendly advice and I am not trying to be cocky like in other threads.
 
IB would have sold out your position 15 minutes before the close.

With a 2K account you shouldnt be trading.

But if you really must then stick to intra day trading with just one YM contract and a stop no bigger than 25 Dow pts.
 
Quote from Businessman:

IB would have sold out your position 15 minutes before the close.

With a 2K account you shouldnt be trading.

But if you really must then stick to intra day trading with just one YM contract and a stop no bigger than 25 Dow pts.
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Yeah, like I said earlier, I don't know how Alaron allowed this to happen, they've really slacked on their standards since I was trading with them.
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Good advice btw, I'm not sure how to get the point across to the OP, he's struggling with concepts that we picked up on very quickly in the game, or else we wouldn't be around today.

There are several vendors who participate in ET, it might not be a bad idea to drop them a PM and see if you can't get in some training with them, at the very least it will keep you from blowing out your account.

JJ
 
who would be these vendors? thanks for the help sofar Jimmy


Quote from JimmyJam:

Yeah, like I said earlier, I don't know how Alaron allowed this to happen, they've really slacked on their standards since I was trading with them.
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Good advice btw, I'm not sure how to get the point across to the OP, he's struggling with concepts that we picked up on very quickly in the game, or else we wouldn't be around today.

There are several vendors who participate in ET, it might not be a bad idea to drop them a PM and see if you can't get in some training with them, at the very least it will keep you from blowing out your account.

JJ
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Quote from TradingBillions:

who would be these vendors? thanks for the help sofar Jimmy
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The only one I trust is austinp. Not that I'm making recommendations around here, but you have a steep learning curve to cut through and I want to help you avoid bankruptcy in the process.

Fact of the matter is that most traders are going to fail anyway unless they have serious capitalization and/or have a mentor to help them along the way. In my case, I just keep working at it (night/day/weekend) until I get what I want ... period.

Good luck,

JJ
 
Quote from TradingBillions:

but what does that mean ANDY? I owe them 2500 ?!? Im soo lost! Ive never done this before so im confused. I have two contacts, so thats 2500 per contract? Now I owe them 5000?
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Follow JJ's and others advise and liquidate this position first thing Monday morning (or Sunday night when eCBOT resumes trading). Next, DO NOT PLACE ANY ADDITIONAL TRADES until you have some idea/education on what you have gotten yourself into. Unlike the DIA, where a 100 pt DOW move equals a $1 change in price, a 100 pt move in the YM is $500.

At the very least, go to the CBOT and CME web sites and read through the "education" links/information.

What I was saying is that by all rights, your margin call should have been $2876, based on your statement that you have 2K in this account.

Good Luck and may this lesson not be too expensive....
 
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