CME changes margin req to INITIAL = MAINTENANCE !?!?!?

Discussion in 'Trading' started by DisciplinedHedg, Nov 4, 2011.

  1. ddouglas

    ddouglas

    This would clearly seem to affect day-margins for brokers that use "maintenance margin" as "day-trading margin."

    I would assume they would just come up with a different day-margin formula - rather than trigger auto-liquidations at the CME Initial Margin amount (which effectively would raise true position-opening margin requirements by an undetermined amount).

    Everyone is going to be looking for clarification from their brokers before getting going Monday morning . . (or Sunday night).
     
    #21     Nov 5, 2011
  2. That is true, but one must also take into account that commercials (usually the most liquid players) are generally net short all markets.

    That is why liquidity problems and margin increases generally cause prices to drop as more longs than shorts are forced to liquidate positions.
     
    #22     Nov 5, 2011
  3. ids

    ids

    We all were confused by zerohedge article. CME did not increase maintenance margin requirements but dropped initial. As always, IB requires initial margin equal to at least 125% of maintenance. IB customers will be minimally affected. For example, overnight initial margin for ES is now 1.25 * $4,000 = $5,000. It was 1.35 * $4,000 = $5,400 before.
     
    #23     Nov 5, 2011
  4. So you are saying that CME initial margin is now $4,000/contract?
     
    #24     Nov 5, 2011
  5. ids

    ids

    Yes
     
    #25     Nov 5, 2011
  6. Have any of you actually looked at your statements?
    Just looked at mine and they REDUCED margin, they did not increase it. They took initial down to maintenance, not the other way around.
     
    #26     Nov 5, 2011

  7. for every product?
     
    #27     Nov 5, 2011
  8. CME is lowering initial margins to enable transfer of MF Global positions to other clearing firms without re-posting margins.
     
    #28     Nov 5, 2011
  9. Does that mean it could just be temporary?
     
    #29     Nov 5, 2011
  10. Yes it will most likely go back to normal after all positions have been transfered.
     
    #30     Nov 5, 2011