Understanding How Margin Requirements Work

[MattSS 10]

I've been researching how to trade dow e-mini futures and on one of the information pages it said that "the (non-day-trade) initial margin requirement for a single Mini Dow contract was ~$6,875" and that "intra-day trades which are not held overnight do not require the usual margins, but only a ‘day trading’ margin, typically half that of the standard amount or ~$3,437.50." What does this mean in practical terms for a beginning trader? Does it mean that if I want to do intra-day trading for dow eminis I need to have atleast 3,437.50 in my account?

 

My credit prob isn't good right now though not super bad. Also, I don't have a job at the moment. I do have some cash though. Does my not having good credit or a job negatively affect my ability to open an account to trade dow e-minis or other tradeable instruments?

[SIUYA 11]

Put simply.....you only need the higher margin IF you hold a contract over night, if you only trade during the day and close it out at the end of the day then the lower margin is what you need.

Re credit worthiness - I laughed, as I have never seen a broker look at your credit unless they are lending you money (maybe they do it behind the scenes) - usually they just take your margin and when you blow up your account you are gone.

remember the margin gives you permission to play at the table but once the margin is used up, then you cannot play any more...so you need more than the initial MINIMUM margin