Overnight Margin for Position Trader

[Pretorian 10]

A small portion of mathematics for position trader.

 

 

 

The day trading margin for the YM is $500 per contract, while overnight margin at Exchange, I use for live trading (CME), is $6500 per contract.

 

Does that mean, I'm going to get a margin call at night hours (4.15-4.30 PM EST for YM) if my trading account is only $5000 and I left an opened position with growing loss for the next day? There is no stop order on it.

 

In connection to this environments, how much funds should one have at least on one's account, to be able leaving 1 order overnight and tolerate a loss up to 50% of the initial account?

 

 

Lucky trade to all fellows!

[Tams 20]

Interactive Brokers have a very strict margin policy

 

they will do a calculation 15 mins before close,

if your available fund is less than the overnight margin,

your position is automatically liquidated IMMEDIATELY.

they don't wait for the close,

and they don't give you notice,

they don't care if your position is making money,

they don't care if you have a bank transfer pending,

your position is closed. period !

[sevensa 10]

A small portion of mathematics for position trader.

 

 

 

The day trading margin for the YM is $500 per contract, while overnight margin at Exchange, I use for live trading (CME), is $6500 per contract.

 

Does that mean, I'm going to get a margin call at night hours (4.15-4.30 PM EST for YM) if my trading account is only $5000 and I left an opened position with growing loss for the next day? There is no stop order on it.

 

In connection to this environments, how much funds should one have at least on one's account, to be able leaving 1 order overnight and tolerate a loss up to 50% of the initial account?

 

 

Lucky trade to all fellows!

 

Couple of points.

 

First:

A month ago, you asked about forming a corporation to manage your money as you have been a consistently profitable trader and now you are asking very basic questions about margin. Something doesn't add up.

 

Second:

You are answering your own questions already. This is how margin works. Your account need to cover initial margin to open a position and should be enough to cover maintenance margin once the position is open. With many brokers, you actually won't get a margin call; they will just close your position automatically if your account doesn't cover margin.

 

Third:

For your second question, can't you do the math yourself? If you need X dollars in your account, how much do you need to maintain X after you lost 50%?

[Pretorian 10]

*A month ago, you asked about forming a corporation to manage your money ......!*

 

Thank U Sevensa for your evil sarcasm, still that didn't help a lot...

 

U are damned right.

I am extremely profitable, while working on a DEMO account with 20.000 virtual dollars.

I have NEVER positioned myself as an experienced professional. I am still learning and have a lot of questions. Some of them could be stupid. But for others, it could help to save their money.

More than that, I used scalping and was trying not to leave an opened position overnight.

Now, I try to find out the environments for position trading, that's a different stuff.

 

There are a lot of traps on the way and there are no books for the matter. Only our own experience and our mutual help.

 

Who could know, that overnight margin is 13 times as much, than intraday? for only 15 minutes? Many of the fellows don't know about this trick... and may be some other tricks still ahead, which one can't even predict... but each of them can kill in minutes.

 

Yes, Sevenca, I do know the result for 2x2, having a Master Degree in Nuclear Physics... but it happens difficult to calculate necessary account funding in this unknown and uncertain environments with a lot of traps and tricks on the way.

 

That is just impossible without somebody's experienced and generous help.

 

If U think different, just don't bother to respond, save your time, words and nerves.

 

Regards

Edited December 11, 2009 by Pretorian

[brownsfan019 17]

Most brokers will close you out before, at or just after the RTH close. Check with your broker.

 

First step in your plan is to make sure you have the $$$ to cover the overnight margins if you are holding overnight.