Hi, This question is similar to the one I asked yesterday (28.01.2010). The subject is "Correct futures - forex backtesting". We may follow the answers to both.
Regards, Ilhan 2010/1/29 Edward Pottasch <[email protected]> > > > hi, > > I was reading about how much cash you need on your account before auto > liquidation kicks in at Interactive Brokers when daytrading futures > > For instance for ES the Initial Margin is 2813, the maintenance Margin is > 2250. From the example they give on their site (see below) I understand that > you need at least Initial Margin + Maintenance margin. However, from > wikipedia I understand that one only needs the initial margin and if your > account drops below the maintenance margin it will liquidate the position. > So does anybody know how it works? I can open 1 position ES with 2813$ on my > account and it will close this position automatically if the price drops > below 2250$? > > thanks, Ed > > > > http://www.interactivebrokers.com/en/p.php?f=margin > > Example: Commodities Margin Example > > The following table shows an example of a typical sequence of trading > events involving commodities and how they affect a Reg T Margin Account. > Although our Universal Account automatically transfers funds between the > securities and commodities segments of the account, to simplify the > following example, we will assume that the cash in the account remains in > the Commodities segment of the account. > Action Change in Cash Resulting Net Liquidation Value *1. Deposit > $10,000.00* + $10,000.00 $10,000.00 *2 Buy 1 ES Futures Contract* > ($2,813.00) $7,187.00 $850.00 * 50 (multiplier) > ES Initial Margin Requirement = $2,813.00 *3. End of Day: ESprice goes to > $860.00* +$500.00 $7,687.00 Gained $10.00 * 50 = $500.00 > ES Overnight Maintenance Requirement = $4,500.00 *Net Liquidation Value > > $4,500.00* *No Liquidation.* *4. Next End of Day: ES price drops to > $800.00* ($3,000.00) $4,687.00 Lost $60.00 * 50 = $3,000.00 *Net > Liquidation Value > $4,500.00* *No Liquidation.* *5. Next End of Day: ES > price drops to $785.00* ($750.00) $3,387.00 Lost $15.00 * 50 = $750.00 *Net > Liquidation Value < $4,500.00* *Liquidation occurs.* > >
