It depends. With futures, you can't lose more than the value of the contracts you hold. The ES is at 1148 so the most you can lose with one contract if the ES went to zero is $57,400. Which is insane but it's the worst possible event. If you had 60 grand in an account and the ES went to zero, you would blowup (at that point maybe even literally) but you wouldn't owe. Alot of people trade many more contracts with much less than that, so if the broker dropped the ball during a dive, you could definitely be stuck with the bill. Anytime I hear of somebody doing 20% days, I think back to my good old days of crazy leverage, which came of course before the bad old days.
So are you telling me that if you have S&P futures contracts overnight and your get a terrorist attack and the S&P opens down 200 points then you wouldn't owe money? Are you also saying that if you are trading S&P futures intraday and you have a move like that on May 6th then the broker automatically liquidates your positions at the point where your entire account is worth nothing? g
The point is the S&P futures are leveraged, in that you don't have to put up the full 57,400$ to trade one of those contracts. So if you don't have 57,400$ and yet you are trading a contract, then you are still responsible for the value of that contract. So if, in your case, ES went to 0, and you had less than 57,400$ in your account, then you would OWE MONEY. http://www.tradingacademy.com/courses/Futures-Trading.aspx "In order to open a Futures position the trader has to have on deposit with his broker an initial margin amount that is set by the exchanges. This amount is typically 5-13% of the Futures contract face value. Think of this initial margin as a down payment when you purchase a house. You put down 20% to control the full market value of your home." So obviously, if you are only putting up 10% of the value of your S&P futures contract, but are still fully responsible for the FULL VALUE of that contract, then if the S&P futures gets annihilated intraday and loses more than 10%, then your account is worth less than 0, and you OWE MONEY. g p.s. this post doesn't even address the fact that there seems to be some confusion by Mr. D about the difference between FOREX and S&P Futures trading.
Holding a 1 lot on a 200 point drop, for the big contract SP you'd need 50 grand. For the mini ES, you'd need 10000. Overnight requirements on ES are about 6k, so you'd have at least that much in your account before it happened. In that case you'd owe about 4k per contract at most. Typo, didn't catch the negative in time before i posted. I changed it. Lol false alarm. It's late here. That post wasn't directed at you anyway.
why is this even a discussion? Of course you can lose more than in your account. Those of you that aren't sure about this obviously either have never traded or are complete newbies and never read the contract they signed. Everytime you sign up for a margin account with any broker it ALWAYS states this fact that futures and options trading involves substantial risk....blah blah, You can lose more money than in your account. Before any of you say it doesn't, it is required by law under ("CFTC") REGULATION 1.55(C). And for those who say it doesn't ever happen, I have personally seen a couple occasions where traders over leveraged overnight with a gap and owe a significant sum to the broker in the morning. It is your responsibily to manage your own account.
Because the OP still doesn't believe that you can lose more than you have. I'm still waiting for his moment of understanding.
...and he doesn't understand the difference between FOREX http://www.elitetrader.com/vb/showthread.php?s=&postid=2835610#post2835610 "I asked Oanda (Forex) earlier about this and at least they said the customer could not lose more than what´s in the account." ...and S&P Futures trading http://www.elitetrader.com/vb/showthread.php?s=&postid=2824339#post2824339 "ALSO: With futures you can´t lose more than what´s in the account."
I think it´s you guys who don´t get what i say. I say i don´t know! Sure i know the difference between Forex and futures. With Cfd´s as i said they clearly state even in the ads that one can lose more than what´s in the account. But still you only need a few 100 and not even have an income to trade. So where are they going to get the money if aliens attack? I think it´s just blah blah but then i have nothing to worry about since my wallet so far is thin.
Up ~90% I´m not all in at all but i will try to increase size when this gets a bit more comfortable.
This market must believe we have many years of deflation coming. Dividend futures. Can´t see what else.. http://www.eurexchange.com/market/quotes/DID/EXD/FEXD_en.html#table