Maintenance margin in foreign markets?

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sunyata
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Maintenance margin in foreign markets?

Post by sunyata » Wed Jun 10, 2009 8:45 am

I have found information regarding initial margin for foreign-market futures however none for maintenance margin. Is margin handled similarly outside the U.S.? Also, I have also seen maintenance margin listed to be the same amount as the initial margin for both U.S. and non-U.S.-based contracts. Not quite sure what this means...

Any help would be appreciated!

Thanks.

7432
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Post by 7432 » Wed Jun 10, 2009 10:37 am

here is IB's list of initial and maintenance margin and the currency required.
http://www.interactivebrokers.com/en/p. ... entity=llc

sluggo
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Post by sluggo » Wed Jun 10, 2009 11:11 am

Here are the details of the margin process used at the South Africa Futures Exchange.
Attachments
margining_specs_SAFEX.pdf
From the SAFEX - JSE website
(245.84 KiB) Downloaded 347 times

sunyata
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Post by sunyata » Thu Jun 11, 2009 10:58 am

7432 wrote:here is IB's list of initial and maintenance margin and the currency required.
http://www.interactivebrokers.com/en/p. ... entity=llc
wow, this is perfect. Thanks!

sunyata
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Post by sunyata » Wed Jun 17, 2009 12:16 pm

sluggo wrote:Here are the details of the margin process used at the South Africa Futures Exchange.
Thanks for the doc: it's useful for estimating probable historical maintenance margin levels based on the PSS multipliers listed in the document. (I've noticed that currently maintenance margin is usually 75% - 80% of initial margin; it's usually higher for indexes.)

Also, I was wondering if you would be able to confirm my understanding of margin and how Trading Blox handles margin calculations during simulations.

Here's an example that demonstrates my present understanding of margin:

Let's say I buy one gold contract. The initial margin is $5399. So I must outlay $5399 to control this one contract. The maintenance margin on this one contract is $3999. The difference between the initial margin and maintenance margin is $1400. If my position shows more than a $1400 loss then I am required to bring the margin total back up to the initial margin by either adding more capital or putting up more collateral. Let's say that my position shows a $1500 loss and that to cover this margin call, I will add capital from my account. Let's say my account started at $10,000. In order to control this contract I had to outlay $5399 in initial margin so this means the total capital currently available in my account equals ($10,000 - $5399) or $4601. I will take $1500 from this available capital to cover the margin call, so now I have ($4601 - $1500) or $3101 in capital available in my account. The $1500 gets added to the margin which now equals $5399 once again.

Now, let's say that I close the position for a gain of $2000 without any more margin calls. My available capital, i.e. the value of my capital account, now equals:

$3101 [available capital prior to closing the position] + $1500 [the margin call amount] + $5399 [capital outlayed to control the contract] + $2000 [profit from closed position] = $12,000.

This is correct because my initial capital account value was $10,000 and I showed a $2,000 gain on the closed position.

Now, assuming that my understanding of the margin process is valid, does TB account for capital that is utilized to cover margin calls, and does it maintain that this capital is not currently available? Also, does TB simulate force-liquidations due to a lack of available capital in meeting margin calls? I ask because I never see any mention of margin calls/force-liquidations in the output.

Thanks!

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