Futures Margin Information

Margin Information

SPAN Margin
PreferredTrade calculates initial and maintenance margin requirements using the SPAN margin system. SPAN Margin stands for Standard Portfolio Analysis of Risk Performance Bond System. It refers to the margin required on a long or short futures contract. The Margin requirement on a futures contract is referred to as a "performance bond". These rates are set by the exchanges on which the contracts trade (Chicago Mercantile Exchange for ES and NQ; Chicago Board of Trade for YM). Please see the following websites for addtional information:

CBOT Mini-sized Dow Margin

E-mini S&P 500 (ES), and E-mini Nasdaq 100 (NQ)

For an order to be executed through the PreferredTrade system, the account must have "cash available" in the futures account equal to or greater than the Initial SPAN margin requirement for the contract(s) puchased or sold. If funds are available in the securities account but not the futures account, it is the responsibility of the customer to transfer funds prior to placing the order. Version 6.1 of our software enables customers to do this. Please note that unlike other securities, there is no difference in the initial margin requirements for long or shrt futures contracts.

SPAN Margin
A futures account has a "margin call" when the equity (or net liquidating value) in the account falls below the SPAN Maintenance margin required by the exchange. If you have a "margin call" in your PreferredTrade futures account, but hold cash available in your securities account, we will transfer funds from your securities account to your futures account to cover the deficiency. Likewise if you have a margin call in your securities account, but hold cash available in your futures account, we will transfer funds to your securities account to cover the deficiency. Any account that begins the day with a margin call will have no cash available to open new positions until the margin call is satisfied.

How Margin Calls are Calculated
At the end of each trading day the equity in your futures account is compared to the Initial and Maintenance Margin requirements set by the exchange(s). If your account has equity that is greater than the Initial Margin the difference may be withdrawn by you or used to purchase additional contracts. This excess is known as “cash available”. If your account has equity that is less than the Maintenance Margin requirements set by the exchange then you have a margin call. The amount of the call will be the difference between the equity in your account and the Initial Maintenance requirement. We will notify you of all margin calls via email on the day the call is incurred. All margin calls must be met immediately. No additional opening transactions or cash withdrawals will be allowed in any account with an outstanding margin call.

Futures are not suitable for all customers. Before trading in any futures, you should contact PreferredTrade, Inc. at (888)781-01283 to obtain a copy of the required futures risk disclosure statement. There is a substantial risk of loss in trading futures and options.