I just got notice that there will be margin increases as we go into the election next week. I guess they are expecting possible volatility based on how this election turns out and rightfully so.
I just wanted to make each of you aware so that you can check with your broker to be sure you don’t get caught off guard by a possible margin increase. Our normal $400 per contract margin is going to $800 per contract effective immediately. On the eve of the election, margins will increase to 100% of exchange requirements, which might be quiet extensive by that point. It might be smart to sit the trading day out on Tuesday November 3rd, just in case. Below is what I received.
| Due to the potential increase in the volatility in the markets from COVID uncertainty and US General Election which is scheduled to be held on 3rd November 2020, we are taking the precautionary measure of temporarily setting the Day Trade Margins for the US and EU Stock Indices to Double (2x) Standard. We have updated the Margin Table Below. We will continue monitoring market conditions, 24 hours per day and we remain actively prepared to make adjustments to margins requirements if deemed necessary. US Presidential Election (November 3, 2020) – Day Trade Margins for the US Overnight Session will be set to 100% Exchange Maintenance Requirements. |
Comments
garrett October 28, 2020 at
Thanks for the heads up 👍🏼
aisakhsd2020 October 28, 2020 at
November 3rd will not be the day.
With the mail in voting chaos the election result will be known on much later day and in many states the voting results will be contested, so i think we should be prepared for a long, volatile market.
Sharon October 28, 2020 at
Did you get that info from your Broker? I assumed such since the chart shows you pay $400/per Contract while I pay $500/per Contract with NT. Anyway, just curious for sure that you got your info from your Broker because we at NT Brokerage don’t get that good info. LOL We have to keep checking CME to know what is going on.
Mack October 29, 2020 at
Yes, my broker sent out a notice.
Gary Alan Ceniza November 9, 2020 at
Hi Mack,
Excuse me for ignorance regarding margin increase and intraday margins. What does it mean and how does affect our trading?
Mack November 9, 2020 at
Margin is how much money the broker requires as a deposit on a trade, so you have to have sufficient margin in order to take a trade. Margin is back to normal as of today, so it’s $400 per contract with my broker again. Based on this margin requirement, to trade one contract, you need at least $400 for margin in your trading account. If you traded two contract, it would be $800 and so on. You actually need a bit more margin than that, as the trade could go against you for a few ticks, so you would need to maintain $400 to stay in the trade, meaning you need slightly more per contract to be safe, otherwise, the minute you went below your necessary margin requirement, your broker would close your trade out. I would say you need $500 per contract to be safe if your margins are $400 per contract.
Margin is basically a deposit that makes sure you can cover any losses you might have in your account. You can google margin and find more detailed information than the basic overview I just gave you.
Gary Alan E. Ceniza November 9, 2020 at
Thank you Mack for enlightening me regarding margins!