Margin Management

Discussion in 'Strategy Building' started by benwm, Feb 22, 2011.

Minimum [Excess Liquidity/Net Value]% usually sufficient for overnight positions?

  1. 1%-10%

    0 vote(s)
    0.0%
  2. 11%-20%

    0 vote(s)
    0.0%
  3. 21%-30%

    1 vote(s)
    25.0%
  4. 31%-40%

    0 vote(s)
    0.0%
  5. 41%-50%

    2 vote(s)
    50.0%
  6. 51%-60%

    1 vote(s)
    25.0%
  7. 61%-70%

    0 vote(s)
    0.0%
  8. 71%-80%

    0 vote(s)
    0.0%
  9. 81% or more

    0 vote(s)
    0.0%
  1. benwm

    benwm

    Something not often discussed:
    "How do you manage your margins?"

    Being forced to make a margin call is clearly not the best way to manage positions. I like to choose my exit points, not leave it to my broker. So I make sure I hold a lot of excess liquidity when I finish trading for the day. But not exactly a scientific process on my part, it's based on feel, experience, market volatility.

    It's possible that I could get forced out of a position overnight by my broker if their automated liquidation system kicked in. It hasn't happened yet.

    Any rules of thumb you use, for example a minimum % of excess liquidity versus margin deposited? Or do you leave your pager/mobile phone on overnight and arrange for a friendly nighttime call when you might be close to a margin call?
     
  2. if a 3% overnight move is gonna kill you, you´re not holding enough