Margin Call?

My commodity statement shows a negative 'free equity' value of -US$30,000, initial margin requirement at US$200,000 and net equity of $170,000.... Can anyone confirm, does this imply a margin call?

The reason I ask is I’m not sure if the margin call is based on ‘initial margin requirement’ or a ‘maintenance margin’. There’s no mention of any ‘maintenance margin’ on the statement, hence my confusion! thanks if anyone can clarify for me.

If I do have a margin call, can anyone confirm what the brokers normal position is - I have fund wire on its way, but it needs to pass through two accounts as it's coming from my business and the broker needs it from an account in my personal name..... so there's no way it would be there by Monday.... Will the broker normally accept proof of 'funds on their way' (ie fax / email instruction)?

Many thanks if anyone can help me out with these questions.

Kind regards
Ridu

 

Ridu, call your broker ASAP. They should answer your questions quickly and most accurately. If they are closed on the weekend then I would call them VERY first thing Mon am.

 

Initial margin is what is required to open a new position maintenance or variance margin is what is required to support a currently openend position. Maintenance margin is normally lower than initial margin I think so you may not get a margin call just yet but I would suspect you would be close to one especially if the market moves more against you.

If your account equity falls below your maintenance margin requirement then you will receive a margin call. Some brokers do not even give you a call they just close the position. You can track what the variance/maintenance margin requirements are on the products you trade by going to the Exchange website where they update these margins regularly in response to volatility.

Hope this is correct and helps!

 

I had something very similar before, do call your commodities broker as soon as possible so this doesnt disrupt your trading. What broker are you using?

 

My commodity statement shows a negative 'free equity' value of -US$30,000, initial margin requirement at US$200,000 and net equity of $170,000.... Can anyone confirm, does this imply a margin call?
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It usually means a Short position...unsecured short.....they may have a trade break or something to fix

 

Whats the longest you have ever held out on paying a margin call i went 5 days with RJ O Brien one time

 

8 months...4k

 

Thanks for your input Busta. Glad to know there's an expert on margin calls among us.

 

yeah, it's a better idea for you to do. your broker should be the responsible for all the explanations you need.

margin call is simply the broker's demand on you using margin to deposit additional money or securities that the margin account is brought up to the minimum maintenance margin.