To continue with the above example, if the account was a day trading account and did not carry the positions overnight, and was afforded 2:1 intraday leverage, then the per contract initial margin rate would be 50% * $13,200 = $6,600, and thus with $50,000 in the account would be able to buy or sell up to 7 contracts. Note that intraday margin may not be available for highly volatile futures at the discretion of the FCM . The intraday leverage is usually set at 2:1 and thus at 50% of the overnight initial margin rate for most symbols and can be as high as 4:1, thus 25% of the overnight initial margin rate. This is granted by the Futures Clearing Member on an account-by-account basis as well as may be restricted to certain futures symbols. However, for intraday day traders, i.e., those that go home flat (close all positions by the end of the day), it is possible to get additional leverage. The above calculations, which is the full margin calculation, apply to positions that are held overnight. If the position incurs a loss and the amount of equity in the account falls below the $36,000 maintenance margin, it will trigger a margin call and a deposit of additional funds or liquidation of part, or all the open futures positions will be required. This means that the account must maintain $36,000 in buying power to hold the original 3 contracts. Let’s continue our example with the S&P E-Mini contracts which have a Maintenance Requirement of $12,000. To continue holding the position, the Maintenance Requirement, which is usually lower than the Initial Maintenance Requirement, must be maintained. To put the initial futures position on, the approved futures account must have enough buying power to cover the Initial Maintenance Requirement for that specific contract.įor example, if the initial maintenance requirement on the S&P E-Mini contract is $13,200, then an account with $50,000 of available funds will be able to purchase or sell short up to 3 contracts on a standard margin Let’s begin with the assumption that a futures trader has been approved to trade futures, and they intend to put on an opening position and fund their futures account with an initial deposit of $10,000. Initial Margin Requirement = Number of contracts * initial margin rate set by the exchangeĪn account with Available Funds = $50,000 The formula for calculating margin on futures is: Please also note that it is your responsibility to adhere to IRA contribution limits and to be aware of any tax implications in regards to withdrawals or other events. As with all day trading or electronic trading accounts, there is a level of risk involved which should be considered. *Lightspeed Trader software only Please take into consideration your financial circumstances, investment objectives and risk tolerance to determine if this type of account is suitable for your retirement account. Available for Traditional, Roth, SEP or Rollover IRA’s.Account is accessible through the Lightspeed Trader platform only at this time.Available for Equities and Options (Level 2 permissions – covered calls, and purchasing calls/puts).PDT rules apply if account falls below $25,000.$25,000 minimum account balance requirement.Overnight positions will return funds the next day after the position is closed. The limited margin will allow for traded funds to be reused the same day with the intraday recycling of buying power.
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