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Indexes Margin Changes

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Cherry
Regular Contributor
At the rate these margins are being increased, trading wont be profitable any more. Any ideas?
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12 REPLIES 12
doomsdayza
Super Contributor
you could move your index trading to a brokerage which offers the SAFEX margin for overnight trades and a much discounted rate for intraday.
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BlueDolphin
Frequent Contributor
How does margins affect the profitability? Its not a cost.
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Cherry
Regular Contributor
Blue Dolphin. The higher the margins the less you can buy???
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SimonPB
Valued Contributor
quantity should be based on risk management (2% rule) not merely number one can afford ..
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Rams
Super Contributor
With Index futures, 2% rule not so precise, and higher margins does not equate to more rands per point profit per contract...so coming down to fewer contracts earns you even less per total points profit?
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Not applicable
man, if margin increases are worrying you guys - you must be maxing out on your capital allocation. I really hope you guys pay attention to that little known issue - and what will almost certainly be unpleasant - called a margin call!
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Rams
Super Contributor
well, in addition to reducing the margin for intra-day trading on index futures, introduce a cost to guaratantee the stop...
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Chopchop
Contributor
And you pay R14.50 or whatever per ALSI contract, so its not as if buying less contracts costs you more in commissions
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orange68
Super Contributor
OST should offer the reduced intraday margins for index futures only as well as the current option, to give its clients a better choice instead of going elsewhere to seek "cheaper" alternatives to play fair within brokers... however imo the current OST is helpful to keep u constantly reminded that you should maintain your risk. reduced margins may encourage greed.
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SimonPB
Valued Contributor
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SimonPB
Valued Contributor
if margin is restricting your trading you are taking on far too much risk and will bust out
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Not applicable
I hear this moaning a lot from other traders and I really cant understand it, Ive done some extensive research on risk management and I cant see (depending on how you calc risk managment 2% or other techniques) I really cant see how anyone can budget less than R 80,000 per contract in your account (eg so acc of R240k can only trade 3 ctx). Thats the minimum, recommended is around R100k for every 1 contract traded....so I have no clue why anyone would complain when it goes from R22k to R25k per ctx.
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