Comments on: Futures (Commodities) Trading and Margin?

By: trio_jeepy

trio_jeepy — Sat, 06 Mar 2010 19:01:13 +0000

It’s not that straightforward.

It’s the margin as a percentage of the overall contract value. Lower maintenance margin doesn’t tell you anything – it depends on the price and number of bushels/oz or whatever you’re buying. The margin on a platinum contract could be $5000, but if platinum is trading at $3000/oz, that could well be a lower margin % than $2500 on a soybean contract, etc.

But generally speaking, the lower the margin, the lower the perceived daily risk, so the opposite of your statement.

By: Bryan K

Bryan K — Sat, 06 Mar 2010 15:31:42 +0000

No, and you can reduce your risk dramatically when you use options along with your futures contracts. Thats what I used to do.

By: T

Sat, 06 Mar 2010 08:54:11 +0000

No. It’s the opposite. The higher the margin requirement…the riskier the underlying investment.

Hope this helped.