Wheat margins are now higher

Now that limit moves for wheat have been doubled, the margins have been increased substantially. My broker has set the margin at $4050 per contract.

This makes it more difficult to day-trade wheat with a small account. Say you have a $12,000 account and intend risking 3% ($360) of your capital on a trade, you would like to take three contracts if your stop is set at 2 points ($100 per contract). However, the trade would be rejected because there is insufficient margin in your account – you would need at least 3 x $4050 = $12,150 in your account before the trade was accepted.

I took a long trade this evening, but didn’t manage to catch a big momentum surge and was stopped out within 2 minutes for a 9.75 point loss. 

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