Am I understanding the math of this futures contract trade correctly?
Am I understanding the math of this futures contract trade correctly?
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Michael A · External communityPost link
External question — Personal Finance Stack Exchange
Author: Michael A
Original post: https://money.stackexchange.com/questions/137626
License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/
Adaptation: HTML converted to plain text; contact email addresses removed.
DISCLAIMER: To be clear, I have zero interest in trading futures. I don't have the knowledge, risk appetite, or capital for that.
I'm just asking this to learn.
The S&P 500 closed at 3,939.43 on Friday, March 12. At
$50 a point
, an E-mini futures contract is worth $196,971.50, with an initial margin requirement of $13,200 and a maintenance margin requirement of $12,000.
I put $13,200 into my account, buy the contract, and the S&P 500 has a bad day and drops to 3900. That's a different of $50 X 39.43 points = $1,971.50, which puts the value of my account at $13,200 - $1,971.50 = $11,228.50.
That means to stay at the maintenance margin requirement, I need to put $12,000 - $11,228.50 = $771.50 more cash into my account, right?
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Quoted from Forex.com.bd-Editorial External question — Personal Finance Stack Exchange Author: Michael A Source score (net votes, not local likes): 2 Original post: https://money.stackexchange.com/questions/137626 License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation: HTML converted to plain text; contact email addresses removed. DISCLAIMER: To be clear, I have zero interest in trading futures. I don't have the knowledge, risk appetite, or capital for that. I'm just asking this to learn. The S&P 500 closed at 3,939.43 on Friday, March 12. At $50 a point , an E-mini futures contract is worth $196,971.50, with an initial margin requirement of $13,200 and a maintenance margin requirement of $12,000. I put $13,200 into my account, buy the contract, and the S&P 500 has a bad day and drops to 3900. That's a different of $50 X 39.43 points = $1,971.50, which puts the value of my account at $13,200 - $1,971.50 = $11,228.50. That means to stay at the maintenance margin requirement, I need to put $12,000 - $11,228.50 = $771.50 more cash into my account, right?
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