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Hi Gerald,
One contract of the S&P Futures is $250.00 X Index, so if the June S&P
contract is at 1,120, the value is $280,000.
Typical margin (Exchange minimum) for position trading the S&P right now is
about $12,500. Day trading margin is half that, $6,250.
So if you are day trading the S&P, you are controlling $280,000 with a
margin of $6,250, or $44.80:$1.
That must be what they mean by leverage... ; )
The way they come up with the margin amount is a mystery to me. I don't
think it is a strict formula. When things get wild (ie. volatility
increases) they increase the margins and vice versa.
Neil
| -----Original Message-----
| From: Gerald Marisch [mailto:gpmtrader@xxxxxxxxxxxxxx]
| Sent: Monday, June 08, 1998 11:21 AM
| To: Omega list
| Subject: Value and margin
|
|
| How is margin and contract value determined for the S&P cash and futures
| market?
| What is "one contract" of the SP? What is its value?
| Futures are profitable because of leverage. How in "leverage"
| figured for
| the SP futures market?
|
|