futures question for newbie

Discussion in 'Index Futures' started by doug456, Oct 14, 2003.

  1. doug456


    i've been looking a trading futures for the first time. i have been looking at the mini s&p, i have a quetion about the margain and maintenence req. on IB website for the ES is says the intraday initial is 1781 and the intraday maintence is 1425, does that mean i have to have at least 1781 in my account before i can trade on contract? and if i do pick up a contract and it goes to 1425 there is a maintence call and the position is liquidated? if this is true why would i need 1781 to trade the contract when is is trading around 1040? why would i need more money than what the contract is trading for? and if i do set up and a margin acct. and i fund with 3000.00 does that mean i get the normal 2:1 margin and get 6000 to trade with?
  2. You're right about the initial and maintenance.

    And on the 2:1 margin question; you do realize the contract is actually worth $50 x 1049 -> $52,450 so the $1425 is already giving you massive leverage; something like 36:1 :cool:

  3. Actually I don't think IB will let you open a new position with less than $2,000.00 in cash/equivalent available.
  4. doug456


    i'm not worried about that, i just want to make sure i know how futures work.
  5. doug456


    got it, thanks so basically the intraday initial is the amount to enter the position, no matter what the trading price is? and the maintenece is the maximum you can lose to until you are liqidated. for the 2:1 margin, that really doesn't apply to futures like stocks then right?
  6. Right.