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In regards Gary's (and perhaps others) question on IRAs:
> You can trade futures in an IRA account, I have done so....
>>Jeff, I've heard that is possible, and that the margin requirement is
higher (about 3 times the min. margin) and a min. acct of 100K. Is that
about right? >> gary@xxxxxxxxxxxx (Gary Funck)
Hi Gary,
I thought that someone answered this question a couple days ago, but if you
didn’t get it, here goes - Forgive the length, but, a story-line may help -
All you need is a fiduciary to keep your account and parcel out the money to
a broker. (I think the original misconception on not being able to trade
"shorts" came from the legal requirement that one not use borrowed funds in
an IRA investment.)
As an example, the Intrust Corp near Chicago IL will set up an account for
you for about $50 a year. I think their initiation fee is about the same,
$50. Their requirement is that you keep 30% of your initial account available
in their control for satisfaction of margin calls. Next you need a futures
broker to take your account. As far as I know most trading corporations will
take your account. (If not, two that I have used are Alaron and First
American Discount Corp, both in Chicago.) Once the account is established,
you ask Intrust to transfer funds to the broker/trading corp for that
specific IRA account and you are in business. The brokerage sends copies of
your trades to Intrust and a copy to you. The amount of your account is
simply between you and your broker. Thus, there is almost no specific minimum
you must have, but one, of course, should use common sense. However, I know
of one individual who started in times past with $5000 (thus, she started
trading with $3500). I started one with $50,000. Both, less than $100,000.
The margin requirements are, or should be the straight margin requirements,
those of the exchange or those of your trading corp, whichever are higher.
The two above allow trading at the minimums. Now about the 30% which Intrust
normally keeps for a margin call. You can deplete this also. All you have to
do, if you get down to the nitty gritty, is ask your broker to call Intrust,
and ask them to send your funds down to meet a margin call. After that, it’s
fairly easy to kiss that part good-bye, also. The $5000 account was run up to
$13,500 in short order and then depleted to a minus $150 or so within the
following 6 months.
I have no promotional interest with the above mentioned firms other than
utilizing their services. Larry Z . .Seattle
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