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I have been trading stocks, funds, and ETFs for about 5 years. I am now testing the waters with the futures market.
Does anybody know why on Interactive Brokers when I input like if I want to buy 1 future contract of DAX, it shows me a value of about 50k€ while it shows me a value of about 5k€ if I want to buy 1 future contract of CAC40?
Cheers,
Alex
Can you help answer these questions from other members on NexusFi?
Today's margin of the Dax future (25€ per contract and point)
Initial (means first contract): 11690€
from second contract: 9352€
All only for day - not overnight.
Same for the mini Dax (5€ per contract and point)
Initial (means first contract): 2338€
from second contract: 1870€
All only for day - not overnight.
@GFIs1: Thank you. After discussing with Interactive Brokers, they told me that what I was seeing as the "Amount" on the Preview Order window (aka the 50k€) was the notional value. They added that this information is pretty much useless. Then I ask myself, why do they show this info on the Preview Order window if it is useless?? Finally, when I asked them how can I see which amount is to be taken out of my cash to fund the DAX future investment, they replied that it is the Intitial Margin. Maybe I am confused and mistaken but I find it hard to believe.
This is easy:
From your account is deducted the Initial Margin for the first contract (as mentioned in my upper post - note that the margin changes daily at IB) and then the Margin from the second+ contract(s). Plus the commission for every buy/sell per contract.
Not more.
The size of the DAX contract is so large a small error will wipe out your account and possibly you can still owe your broker more money. Just like most "retail" traders do not trade the full size S&P, they trade the e-mini. The other reason is when you want to increase the number of contracts, the mini margin requirements are a lot smaller.
