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
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. |
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