Margin charge for holding 6 contracts?

Discussion in 'Index Futures' started by r-in, Feb 24, 2007.

  1. r-in


    Haven't run into this before as I've always closed positions I needed to before day close. This time I missed filling 6 ES contracts at the close. When Globex reopened at 3:30 Central time I covered them all in 1 min 19 secs according to the time stamps. I had a $47 margin charge for that 1 min 19 secs, and curious if anyone else has been hit with that at a broker before. I'm not questioning that I screwed up missing the day close, more the charge seems hefty, especially being that I closed them out right away at the Globex reopen. Its the weekend so I wait until Monday to call, and I accept my screw up, but the charge seems pretty excessive. I was under margined for that time by $16000.
    dumb a-- screwed up :D
  2. Read the "fine print" and Fee Charges table in your account paperwork.
  3. r-in


    Actually did, and didn't find anything relating to charges, just a section that I would need to cover within an hour of a margin call. Which I did, actually ~17 minutes by liquidating the positions. I didn't actually recieve a notice until a few hours later, in which the last sentence noted that I had covered and no further action was required.
  4. You're very lucky

    The margin charge was because "somebody" had to poney up the performance bond required for those six contracts, in this case, it was the brokerage house.

    The real issue here is not that you were charged a negligible amount of money for the brokerage to loan your account the use of their money for your over-leveraged over night/weekend position, but rather can you learn to use effective money management after this slightly scary warning sign?

    Good trading,

    Jimmy Jam
  5. r-in


    While not disagreeing with the fact that I screwed up, I can also say, had I needed to, I have the ability to cover the margin and losses incurred. I prefer to keep my accounts funded on the low end and send in if I need to, just my preference.
  6. OK fine.

    You need a cut-off time ... and you need to stick to it regardless of what is happening with the trade.


    You need to factor-in the overnight margin into your trades just in case something like this happens again.

    Good trading,

  7. minmike


    Thats less than a 1/4 tick on 6 mini's. Small when you look at it that way.
  8. Are you sure it's a "margin charge"? Did they call it that on your statement?

    I'm guessing that it is your loss from the closing price to the execution price. But maybe I'm wrong.

    By the way, if you fund your account low, with the idea that you think you have time to wire the funds...forget it. IB is simply going to sell you down to a level where you are in compliance. They're not waiting for you funds. Frankly, I'm surprised they didn't close you out prior to the close automatically.

  9. You'd be surprised OT. Other than IB not many on-line brokerages use real-time margining/risk. Scary huh?

    I unintentionally found a flaw in IB's controls several years back. I was short Bonds on "daytrade" margin during an abbreviated pre-holiday session. Neither IB nor I knew to close out the under margined position at the special closing time. Could have been costly over a 3 day weekend, lol.
  10. LOL! I could have sworn I read "IB" in his original post....guess not. It doesn't really surprise me though that other firms aren't real time in their margin. It's gonna catch em one of these days.

    Personally though, I'm never close enough to the edge that the margin differential makes a difference. What surprises me is that anyone is! LOL. Including you. LOL.

    #10     Feb 26, 2007