One of the great things about being a modern futures and options trader is the ability to get an education on your own terms. No longer do you have to sign up for expensive seminars or spend four years earning a BS degree in financial management. A vast trading curriculum is available free of charge,… Read more.
Futures Spread Margin
Perhaps the single largest benefit of trading futures is the diversity of opportunities. Market participants are furnished with access to a wide variety of products and leverage, opening the door to countless trading possibilities. In essence, the only thing limiting opportunity is the trader’s imagination. One way that industry professionals engage the markets is via… Read more.
If you’re new to futures, then you may find yourself asking: What is margin trading? In short, margin trading is the act of securing the rights to an asset via third-party financing. However, its functions and applications in the futures markets go much deeper than simply taking out a loan.
For many futures traders, the word margin carries a rather negative connotation. Flashbacks of short-notice bank wires or premature exits from winning trades often haunt practitioners of haphazard risk management. To some, it’s a nasty six-letter word, and margin call is the kiss of death. Of course, the truth of futures margins is much less… Read more.
This blog update is highlighting the Market Action Alert Soybean Spread entry that was released and sent to subscribers of the Market Dimensions advisory 1/5/15. This is the 2nd spread entry for the month of January 2016. If you would like to follow these Market Action Alerts, as well as my short term futures trades, contained with-in my MDA SnapShot, I encourage you to sign up for your FREE subscription to the service.
Here is a detailed example of how to find the margin requirements for the Dec/July Corn Futures Spread on the CME Group website
This articles explains in detail how to find the Futures Spreads margins through the CME Group’s website and the ICE Exchange’s website.
One of the main draws traders have towards futures spreads is the reduced margins, but it is important to understand why the exchanges issue margin credit for spreads. The exchanges recognize margin for both flat priced futures and futures spreads should be proportionate to their risk and volatility. In this article, we will go over examples of reduced margins in Crude Oil spreads.