QUestion on Futures

[Vadex]

So i was looking at the /ESZ08 and I decided to paper trade it. Now i only paid $3.50 for the commission. My question is how much money did i put out of my account or money that is being held? I read some where that some brokers let you trade with 500, others need a 2000 minimum. Is it just depended on the broker? For example ES goes up 1 point i get 550, but in the other broker i would get 2050?

[cire2222]

no your not seeing it correctly. 1 ES contract is the same in any account no matter what margin they give you. Futures are all traded on margin. Do not think of how much $ you are 'putting up' it is not like buying a stock where you buy $5000 worth of stock so your risking a total of $5000.

Say you have a $500 margin for your futures account, that means that for every $500 in your account your broker will allow you to buy 1 contract. That contract gains and loses the same amount of $ as if you had a $4000 margin. 1 ES point = $50 per contract. your still risking the same amount of money it's just that one broker will allow you to leverage yourself more than the other. with a $10,000 account and $500 margin you can trade 20 contracts (crazy idea with that size account) with that same account and a $4000 margin you would only be able to trade 2 contracts at a time until your account gets bigger. So the first broker has allowed you to risk much more

[Vadex]

k thanks..........

[Vadex]

so if i want to buy 1 ES contract, i need 6188 in my account as margin According to the CME site, is that standard for all brokers?

[Simonyadig]

Originally Posted by Vadex

so if i want to buy 1 ES contract, i need 6188 in my account as margin According to the CME site, is that standard for all brokers?

Depends on the broker's margin requirement. Some are as cheap as $500 per contract, most brokers will require you to have more than that in your account. The broker I use is 500 per contract, but you need to have at least $1000 in your account to trade for that day. You really shouldn't be trading futures with that small of an account either. I'll be honest and tell you that you should not be looking to trade futures until you have at least a couple years experience trading with much less leverage.

[mookie9920]

Originally Posted by Vadex

so if i want to buy 1 ES contract, i need 6188 in my account as margin According to the CME site, is that standard for all brokers?

Thats to hold it overnight...daytrading margins are much cheaper like Simon said

[Vadex]

How does that work and how come not all brokers do that?