Initial margin requirements are easily accessible on the thinkorswim platform. To see initial margin, tick size, and other contract specs, follow the instructions in figure 1. In this example, an E-mini S&P 500 (/ES) futures contract has, as of August 2021, an initial margin requirement of $12,650. Be mindful that futures contract margin requirements vary for each product, and they can change at any time based on market conditions.
Td ameritrade futures margin requirements
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Qualifying TD Ameritrade account owners can apply online to trade futures products. To learn more about the application process, or about futures in general, please visit www.tdameritrade.com/futures.
There are also hedging opportunities. For example, a bitcoin owner who wants to keep the cryptocurrency long term but is concerned about short-term pullbacks could sell a bitcoin futures contract. If the price of bitcoin falls between now and the contract expiration, the price of the contract will typically decrease and the owner can then buy the same contract at a lower price to close the position before the settlement date. This can help offset the price decline in their actual bitcoin holdings.
Conversely, if bitcoin prices climb, the price of the bitcoin futures contract will also increase, and the owner may have to buy the contract, or wait until settlement, and take a loss at the higher price.
Carefully consider whether trading in bitcoin futures is appropriate for you in light of your experience, objectives, financial resources, and other relevant circumstances. For additional information, check the TD Ameritrade bitcoin futures page.
Futures and futures options trading services provided by Charles Schwab Futures and Forex LLC. Trading privileges subject to review and approval. Not all clients will qualify. Prior to a name change in September 2021, Charles Schwab Futures and Forex LLC was known as TD Ameritrade Futures & Forex LLC.
The recovery from the COVID-19 pandemic illustrates the importance of oil and other commodities in the global economy. In an uncertain environment, alternative investments, such as Micro Crude futures, could help qualified investors navigate risks and protect or diversify their portfolios, according to Adam Hickerson, senior manager, Futures & Forex, at TD Ameritrade.
Futures and futures options trading services provided by Charles Schwab Futures and Forex LLC, a CFTC-registered Futures Commission Merchant and NFA Forex Dealer Member. Trading privileges subject to review and approval. Not all clients will qualify.
Portfolio margin is a risk-based margin available for qualified accounts. Portfolio margin computes real-time margin for stock and options positions based on their risk rather than the fixed percentages and strategy rules associated with Regulation T margin.
Portfolio margin at TD Ameritrade uses theoretical pricing models to calculate the real-time losses of a position at different price points above and below the current underlying price. The largest theoretical loss identified is the margin required for the position.
On December 12, 2006, the Securities and Exchange Commission (SEC) approved a rule change to make portfolio margin available to brokerage firms. The Options Clearing Corporation (OCC) provided broker dealers with the only approved model, the Theoretical Intermarket Margining System (TIMS), which is a baseline minimum risk-based model to calculate margin requirements for portfolio margin accounts once a day after the equity market is closed.
Now that you have an introduction to portfolio margin, and a basic understanding of some of the features and characteristics when compared to Regulation T margin, you can learn more about how portfolio margin works here.
Portfolio margining involves a great deal more risk than cash accounts and is not suitable for all investors. Minimum qualification requirements apply. Portfolio margining is not available in all account types.
Portfolio margining privileges subject to TD Ameritrade review and approval. Not all clients will qualify. Please consider your financial resources, investment objectives, and tolerance for risk to determine if it makes sense for your individual circumstances. Carefully read the Portfolio Margin Risk Disclosure Statement, Margin Handbook, and Margin Disclosure Document for specific disclosures and more details. You may also contact TD Ameritrade at 800-669-3900 for copies.
Margin tells traders how much capital may be needed to enter a position, and how much is needed to keep it open. Use this handy guide to learn how it's calculated, why leverage is important, and how margin calls work.
Options on futures are not suitable for all clients and the risk of loss in trading futures and options on futures could be substantial. Additionally some options expire prior to the final settlement or expiration of the underlying futures contract. Option writing as an investment is absolutely inappropriate for anyone who does not fully understand the nature and extent of the risks involved and who cannot afford the possibility of a potentially unlimited loss. It is also possible in a market where prices are changing rapidly that an option writer may have no ability to control the extent of losses.
TD Ameritrade Network is brought to you by TD Ameritrade Media Productions Company. TD Ameritrade Media Productions Company and TD Ameritrade, Inc., are separate but affiliated subsidiaries of TD Ameritrade Holding Corporation. TD Ameritrade Holding Corporation is a wholly owned subsidiary of The Charles Schwab Corporation. TD Ameritrade Media Productions Company is not a financial advisor, registered investment advisor, broker-dealer, or futures commission merchant.
Watch this video to learn how to trade futures on the thinkorswim platform. For help on how to trade them using the thinkorswim Mobile app (formerly TD Ameritrade Mobile Trader), check out these tutorials for iOS and Android.
Through the thinkorswim platform and Mobile app, qualified traders have the ability to trade futures on three different exchanges: Chicago Mercantile Exchange (CME), ICE Futures U.S. (ICE US), and CBOE Futures Exchange (CFE).
You can view initial margin requirements in several different sections on the thinkorswim platform. They can be found under the Futures tab as well as the Trade tab in the Futures Trader section. All you need to do is enter the futures symbol to view it.
A futures contract is an agreement to buy or sell a financial instrument, such as the E-mini S&P 500 (/ES), or a physical commodity, such as crude oil, for future delivery on a regulated commodity futures exchange.
Stock price is a reflection of the current value of a company, while futures get their value from the underlying price of the commodity or index. Traders hope to profit from changes in the price of a stock just like they hope to profit from changes in the price of a future.
1. Note: Commission rates depicted above are quoted on a per-contract, per-side basis. Pricing does not include customary National Futures Association (NFA) and exchange fees. Additional fees can apply at some foreign exchanges. NFA and exchange fees can increase or decrease depending on the rates set by NFA or by the various futures exchanges, as applicable. Additional market data fees can apply at some futures exchanges.
Futures and futures options trading involves substantial risk and is not suitable for all investors. Please read the Risk Disclosure Statement for Futures and Options prior to trading futures products. Additional CFTC and NFA public disclosures for Charles Schwab Futures and Forex LLC can be found here. Futures accounts are not protected by SIPC. Futures and futures options trading services provided by Charles Schwab Futures and Forex LLC. Trading privileges subject to review and approval. Not all clients will qualify.
We are issuing this investor guidance to provide some basic facts to investors about the mechanics of margin accounts. We encourage any investor reading this communication to also read Purchasing on Margin, Risks Involved with Trading in a Margin Account. 2ff7e9595c
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