Shorting ES future regulation

Discussion in 'Index Futures' started by jessicatrader, Oct 23, 2014.

  1. Just out of curiosity, is there a specific rule or regulation about shorting es when market is in downtrend? (not for trading but holding position overnight for a few days to weeks)
    Anyone had problem shorting es from 07 to 09? or have you ever been forced to cover before you decided to do so?
    Thank you in advance for your kind reply !
     
  2. Unless the market has hit a circuit breaker and is in a "lock-limit" no there is no regulation on shorting in a falling market.
     
    jessicatrader likes this.
  3. TTTT

    TTTT

    Thank goodness. One of the many reasons I like futures - you don't have to worry about any uptick rules.
     
    jessicatrader likes this.
  4. moonmist

    moonmist

    Hi,

    Your brokers can always increase the margin requirement to force you to cover.

    If memory serves:

    During the flash crash, ThinkorSwim temporarily increased the margin requirement of ES by a factor of ten ( or something like that ).

    Also, CME will increase the margin, if VIX is high.

    Just my two cents.
     
    RichardRimes and jessicatrader like this.
  5. Thank you for your help !!
     
  6. That is a very sharp increase in margin requirement. They increased overnight maintenance margin by 2,5, or 10 times more?
    Thank you for your reply :d
     
  7. Read the new account documents. The broker can make the margin whatever they want based on their assessment of risk. They can do it by product or overall.
     
  8. moonmist

    moonmist

    Between October 2007 and March 2008, Interactive Brokers did increase the overnight margin of shorting ES and ER2 options by a factor of 3 to 10 depending on strike price and expiration.

    You may be surprised by the margin requirement to short a twenty points out of money ES PUT ( or CALL ) expiring within few weeks via Interactive Brokers.:D Unless they change the rules recently, it is still very high.

    Of course, it is highly unlikely that they will do the same for ES and TF futures.
     
    Last edited: Oct 23, 2014
    TTTT likes this.
  9. TTTT

    TTTT

    I think this is one of the big pluses of doing options through TOS. Their rate structure might be more, but they have a (IMHO) much more sensible way of managing the margin requirements on the OTM positions.

    There was a segment in the show talking about how TD tried to replicate the TOS calculations to be more competitive. After quite a bit of effort, they couldn't do it which is why they ended up buying the company instead of trying to replicate it.
     
  10. TTTT

    TTTT

    Wow. You are a rare breed. Absolutely correct. It's scary reading through those documents. If I had to summarize them, it would be: "lots of stuff could go wrong and we cannot be held responsible for any of it so good luck".

    & luck seems to be what is needed quite often (I'm a survivor of MF Global, PFG + a whole bunch of other "wow, that seriously happened to my account huh" debacles).
     
    #10     Oct 23, 2014