Hey all, I'm new to futures trading. I'm currently short contracts in the emini, and I held them past the market close. What are the hidden charges associated with this? 1) Are there dividend related charges 2)are the interest/carry over charges like in forex. Or is it just what the price is is what you get. Just want to know what to expect. Thanks -steps
There shouldn't be any carry over/hidden charges, unless you don't have the margin required to hold those positions. Your broker may penalize you for being on a margin call...some do, some don't. As long as you have enough for margin it wouldn't cost you anything extra to hold them overnight. Come to think of it, this is a question you should ask your broker about. If they can't give you that kind of support, and with your experience, you should shop for a broker who can help you with those kinds of questions.
Yeah I use interactive brokers. I didn't think there were charges, but I kind of had an "oh shit" moment. I learned the hard way that if you are short options and get assigned, you have to pay the dividend and I got punched in the face with that before. But actually, since I am short, I am actually loaning money to my broker so I would be getting the interest on the principle, no (according to the forex model)? Thanks for the info.
If you use the IB flat rate futures commission schedule there are no overnight carry fees. The IB unbundled futures commission schedule charges ten cents a contract for holding overnight. You are not lending any money by being short a futures contract. There is no borrowing or lending of money in the futures market. Futures margin is a performance bond. For stock index futures all the interest and dividends are taken care of in the premium/discount. Read detailed information about the premium/discount at http://www.indexarb.com/ .