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. |