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View Full Version : When would I get a margin call???


fastmover
06-06-2011, 12:52 PM
I am almost always in the GC (gold futures) market, long or short. For each contract I like to have protection from a "black swan" event. So when I am away from the market at times during the day or night, I have GLD calls & puts in place to limit a big move against.

So, just to make sure that I am rigged right, if gold were to move $300 down on the GLOBEX open Sunday night (-$30k/per contract), and I trade $20k equity per contract, I am $10k short. When would I get the margin call?

If not until Monday sometime (coincidental when the NYSE is open) then my GLD puts would offset some of the loss. If not during NYSE hours, then these puts wouldn't be effective to control this type of risk.

Thanks
FM

insidedealer
06-06-2011, 12:58 PM
You'd normally get a margin call once your equity dropped below the maintenance level(14k?), and the call would normally come hours later. But in an extreme case like you describe, the broker I believe would sell out your position in the middle of the night as your equity reached 0. You should call your broker to find out how they'd handle it. That's better than asking us to speculate, on speculating.

fastmover
06-06-2011, 01:14 PM
You'd normally get a margin call once your equity dropped below the maintenance level(14k?), and the call would normally come hours later. But in an extreme case like you describe, the broker I believe would sell out your position in the middle of the night as your equity reached 0. You should call your broker to find out how they'd handle it. That's better than asking us to speculate, on speculating.

Thanks for the good advice.

Antimagnetic
06-06-2011, 03:58 PM
what about options on futures? are they too expensive?