Futures traders are responsible for maintaining their account balances within the margins specified by their broker. Fortunately for NinjaTrader users, NinjaTrader 8 provides direct visibility into your available excess margin, helping you manage your positions to meet margin requirements.
Check out a quick start guide to managing futures margin:
Understand position and margin management
Futures margin is the amount of money you should keep in your brokerage account to protect against potential losses on an open trade. It is usually a small percentage of the contract, usually between 3 and 12% of the theoretical value of the futures contract.
- The intraday margin or daily trading margin, is the minimum account balance required by your broker to hold a position of a contract (long or short) during trading hours.
- The initial margin , or trade margin, is the minimum amount per contract required by the exchange that must be held in your account to maintain a position for several days. The initial margin is significantly higher than the intraday margin requirement.
For example, while a balance of only $50 is required to hold a one-MONTH contract position during business hours, a much larger amount of $1,320 is required to maintain this position beyond closing. . It is essential that futures traders understand margin requirements to avoid forced liquidations and penalties.
What is Excess Margin?
excess of Margin is the amount of money in your account above the minimum margin requirements when you are in position. Excess margin management is critical in futures trading, as insufficient excess margin means you are in violation and could be subject to liquidation and/or fines by the dealing desk of the broker.
In general, the easiest way to manage excess margin is to trade contract sizes appropriate to your pre-determined risk levels and account size.
While futures traders should always be aware of open positions and account balance, the Excess Margin columns on NinjaTrader’s Accounts tab screen make controlling margin much easier.
Add visibility to your available margin on NinjaTrader
Excess Margin column enhancement is available through the latest version of NinjaTrader 8. Existing users can update to the latest version here and new users can start here.
To view Excess Margin columns through your NinjaTrader platform:
- Click on accounts at the bottom of the NinjaTrader Control Center. The Control Center is the default window that appears when you first launch NinjaTrader and always appears when NinjaTrader is running.
- Then right click and select Properties .
- Under Columns, check Excess Initial Margin Yes Intraday Excess Margin .
- Click on Accept .
The control center example above displays account information for a trader holding 1 Micro E-mini S&P 500 (MES) futures contract. The position is currently in balance, meaning there is no profit or loss on the position. The merchant’s initial account balance was $1,000. Note: Parentheses indicate a negative number.
- Excess intraday margin = $950, or $1,000 opening balance minus $50 intraday margin
- Excess Initial Margin = ($320), or $1,000 Initial Balance minus $1,320 Initial Margin
What do these numbers mean?
- Excess intraday margin is the amount of money in an account above the intraday margin required to hold a position during trading hours. In the example above, the Excess Initial Margin is $950, which means there is $950 in the account above the $50 intraday minimum margin for MES Futures.
- excess initial margin is the amount in your account above the minimum margin required to hold a position overnight. In the example above, the initial excess margin is ($320), meaning there is no sufficient excess margin to hold this position past the close of today’s session.
Any number in parentheses is a negative value and therefore means that your excess margin is insufficient.
For NinjaTrader Brokerage clients, intraday positions must be closed 15 minutes prior to session close. This is at 3:45 p.m. CT for the most popular contracts, which is 15 minutes before the official session closes at 4:00 p.m. CT. At this point, operators should make sure they don’t have a negative value in the column Excess intraday margin .
For swing or position traders, who plan to hold a position overnight or for several days, sufficient excess initial margin should also be maintained.
Assign a risk model to your account
Note that for these columns to be populated correctly, there must be a risk model assigned to the account(s) in question.
- To assign a risk model to an account, on the Accounts tab, left-click an account to select it.
- Right click and select edit account .
- Under Risk, select the appropriate risk model. *
- Click on Accept .
* NinjaTrader Brokerage clients must select NinjaTrader Brokerage Default .
For more information on creating and editing risk models, click here.
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