Futurs For You by Dan O誰eil
MARGIN FOR ERROR
After years of trading stocks exclusively,
I致e recently started trading futures.
Unfortunately, I also just received my
first margin call. While I was able to get
through it without too much difficulty
this time, it made me realize I probably
didn稚 do enough homework on how
margin works on the futures side. Can
you break down some of the differences
between margin in the stock market and
margin in futures?
A margin call is indeed a harsh welcome
to the world of futures trading.
But after surviving one, the important
thing is to learn more about how margin
works in order to avoid another.
Understanding the several different
kinds of margin involved in futures
trading is as essential to succeeding in
these markets as anything else you
could possibly learn. Having had previous
investment experience in the
stock market, your knowledge of margin
was likely limited to the cash down
payment and money borrowed from
broker to purchase stocks. But in futures
trading, margin has an altogether
different meaning and serves a completely