What is wrong with using the 500.00 margins some brokers offer? Isn't that why they offer 500.00 margins? So the traders will use it and have more buying power that will give the trader more of an edge at winning? LOL. What do you mean you might be tempted to use it? LOL.
Prudent risk management for both traders and the broker. If many undercapitalized traders assume too much risk through over-leveraging and blow up their accounts, any shortfall may have to be absorbed by the broker, with a negative impact on its balance sheet. Think about it. If all your fellow traders at the firm regularly do 10 ES contracts per trade on a $5,000 account, would you not be a little concerned?
I think they offer $500 margin to attract newbies who don't realize how dangerous it is. You may well be able to handle it. I congratulate you. I know I can't, and I've been doing this a long time. Frankly, I don't want my account with a broker who is trying to attract people who will be trading 10 lots on a $5000 account, as the previous poster put it.
I thought it was a law that brokers have to carry insurance for our deposits. Our money should be safe with a broker which is a member of the NFA(National futures association). Even if the broker files bankruptcy, we still should get our money. If a regular bank files bankruptcy, we still can get out our money out, so I would think a NFA approved futures broker would be the same way. (I could be wrong, and correct me if I am wrong. This is what I am under the impression.)http://www.nfa.futures.org/BasicNet/ Their membership is public information. Anybody can do a free online broker search to look for complaints which have been filed or settled. If the broker's name is not on that list, then I wouldn't do business with them. The $500.00 - $300.00 broker which I checked out is on that list.
My god, you have no idea what you are talking about. U.S. futures trading accounts have absolutely no deposit insurance or guarantee, whatsoever. Futures trading accounts are totally different from securities broker accounts and bank accounts. If your futures broker goes bankrupt, you can lose your entire account. Customers of the futures broker Refco claim they lost about a billion dollars in the Refco bankruptcy in fall 2005. This is why the futures regulators say futures trading customers must conduct due diligence to select a broker less likely to go bankrupt. Brokers who offer $300 to $500 futures margins are at much greater risk for bankruptcy, which can wipe away your account, than are brokers who limit their risks by imposing higher and safer margin requirements. If you deposit funds with a futures broker, you are essentially loaning your money to that broker, and if that broker is unable to repay you, because it must first cover trading losses incurred by other customers, then you lose part or all of your account. You should not be trading futures until you learn the basics, which you obviously don't yet know. I'd also like to suggest that it seems a bit unfair to see somebody like you, who is so lacking in his knowledge of retail brokers, to have posted such a negative review of IB (as mentioned by IBSoft). I think you should first learn something about trading, before you attempt to advise others. Let me also explain that in order to take advantage of IB's offerings, a customer must possess some degree of knowledge and technical sophistication, which you clearly lack. I would say IB is not a good broker FOR YOU, because you don't have what it takes to be an IB customer, but that for you to blame the results of your own shortcomings on IB is unfair and just based on ignorance.
IBsoft, I suggest you Quit sending me harrassing emails. IB(Interactive Brokers) harrasses people by emailing them harrassing emails if you don't sign up with them as a broker and you tell others about your bad experience you had with IB(Interactive Brokers).
i doubt u even got a chance to sign up with ib, im sure they read right trough u and told u to get lost in a flash.
I sent you a PM, not an email or emails. I did not harass you, I just questioned your competence to review a broker where you don't have an account. If you disagree, feel free to post my PM verbatim.