Futures Margin: Day Trading vs. Overnight Trading

When learning to trade futures contracts, it is essential that new traders understand the margin requirements of futures contracts and how these requirements can change depending on the length of time they are held or carry a position.

Specifically, the margin requirement to hold a position between trading sessions is significantly higher than the margin required to hold a position only during regular trading hours. It is important for futures day traders to be aware of these margin requirements and their respective time frames for exiting positions before closing.

Check out a quick start guide to managing futures margin:

What is a nightstand?

An overnight position is a position, long or short, that is not flattened until the end of the trading day. In order to take this position beyond the close, the initial margin requirement set by the applicable exchange must be met. If the trading account does not have sufficient funds to meet these requirements, the broker may liquidate the position and additional charges may be incurred.

If the position remains open, the account may also be subject to a margin call or broker request to bring margin deposits to required levels. The client then has 24 hours to transfer funds to the trading account to meet the initial margin requirement.

In addition to margin requirements, it is important to understand the risk associated with holding a position overnight, such as exposure to possible adverse price movements that occur outside of normal trading hours.

Intraday Margin vs Initial Margin

    • The intraday margin this is the minimum amount of money per contract required in your account to hold a position during normal trading hours.
    • The initial margin this is the minimum amount per contract required in your account to hold a position overnight. The initial margin is significantly higher than the intraday margin requirement.

Below is a chart showing NinjaTrader Brokerage’s intraday and initial margin requirements for Micro E-mini S&P 500 Futures (MES). As you can see from the ever-increasing margin requirements, knowing the account size needed to hold a position after the market closes is extremely important.

When is the “close” in the 24-hour futures markets?

Futures products are traded almost 24 hours a day, 6 days a week. This allows greater trading flexibility and the freedom to manage positions almost any time of the day. However, it can also make it difficult to keep track of the official “open” and “close”.

To avoid accidentally taking a position past the close, it is imperative that day traders know the trading hours of a futures contract. For NinjaTrader Brokerage clients, intraday positions must be closed 15 minutes prior to session close. It’s 3:45 PM CT for the most popular CME contracts, which is 15 minutes before the session officially closes at 4:00 p.m. CT.

Futures trading hours are determined by their respective markets. Each category, such as energy or the stock index, has its own opening and closing hours.

      • Trading hours for CME Group futures products can be found here .
      • Trading hours for ICE futures products can be found here .
      • Eurex futures trading hours can be found here .
      • CBOE futures trading hours can be found here .

Monitor margin to avoid breaches

It is important to remember that margin requirements are the minimum amount required by contract to occupy a position. Although position management is the responsibility of the individual trader, it is recommended to give the trade enough leeway to better avoid margin violations.

      • Advice: Use NinjaTrader’s Excess Margin Account screen to monitor available margin directly through the platform!

Leverage can lead to losses in excess of initial margin and traders should be aware of the risks associated with futures trading. Risk management policies are strictly enforced and may result in execution fees as well as higher daily trading margins.

Getting started with NinjaTrader

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Ready to start following your favorite markets? The NinjaTrader platform is always free for advanced charting, backtesting, and trading simulation. Get started today with your free futures trading demo!

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