What are the requirements for daily margins?
Margin is a term used in the Community Trading with Shares and Futures and refers to a performance bond rather than the entire amount traded. The United States exchanges allow reduced margins for traders who enter and climb the same day, called daily trading margins. Futures brokers may, but do not have to allow their daily clients to publish only daily margins. These margins are approximately half of the regular night margins. Other countries may have different margin requirements and/or rules that do not allow reduced daily trading margins. Daily business margins in futures can be a much smaller fraction of traded value than on the stock market. For example, daily trading with ten -year bonds after ten years is often below $ 1,000 (USD) for continuation, and each contract has a nominal value of $ 100,000. $ 25,000, which a stock merchant has to publish to trade $ 100,000 from USD, will allow him to trade with 2.5 MiLiony USD ten -year US government bonds.
Many American Futures brokers receive only $ 5,000 to open a futures trading account where a trader can use a daily margin. The broker has a wide discretion in deciding what business activities qualify for daily margins. Many brokers define daily trade as any trade that is open and closed during regular US trading hours. The actual amount of margin required for each contract is determined by the stock exchange and is based on volatility and risk of tool trading. The CME Group is a good source for the current statement of requirements for regular US margins.
daily stock market trading differs from daily trading at Futures markets. American Sekurikomise for Binding and Exchange (SEC) defines a daily pattern trader as one who performs four or more stores in five working daysThe Margian account is more than 6% of its business for five days. Daily business margins must meet the SEC request to at least $ 25,000. The maximum lever effect for the shares trader is four to one: it can trade up to $ 100,000 worth a share of $ 25,000 on its minimum account.