Hi All
I am starting to trade futures through interactive brokers and have some questions.
1) Looking at the copper futures contract (HG Dec'16), IB shows that the multiple = 25,000. Does that mean for every $1 move, the risk for reward is $25,000. For every 0.0001 move the risk for reward = $2.5?
2) looking at the mini-gold contract (QO Dec'16). IB shows the multiple = 50. So I'd presume every $1 move = risk for reward of $50.
3) looking at wheat futures contract (ZW Dec'16). IB shows the multiple = 5,000. I'd presume that for every $1 move, the risk for reward = $5,000. This is pretty fuckin leveraged!
I hope there is some genius out there to help me out. Cheers
bump!
I'd like to know too as I trade a lot on IB and am wanting to go long copper at some point! :)
Surely there is someone on WSO that trades futures!
http://www.cmegroup.com/trading/metals/base/copper_contractSpecs_future…
We can see this, hence where I go all the data from above.
We just looking to get more info on what the multiplies mean... Hence my initial question. I wouldn't have asked otherwise. Please help if you can...
25,000 pounds, minimum fluctuation of $0.0005 per pound so.... $12.50 is one tick per contract.
That's the contract size determined by the exchange, not IB. Contract size x tick size = your risk per tick
Ok, please help me out, looking at these specs: http://www.cmegroup.com/trading/agricultural/grain-and-oilseed/wheat_co…
Contract unit: 5,000 bushels 1/4 of one cent per bushel ($12.50 per contract)
How do I calculate my risk per tick for this one? Surely its not $12.50, given it each tick =1/4
5000 bushels x $.0025 = $12.50 per tick
thanks mate. So that means, essentially betting $50 per $1. That's not as bad as I thought. I wonder if there are any more leveraged wheat futures than this one.
Thanks for the help.
If you want more leverage just trade more contracts using less margin. After all, leverage in futures is just notional value/your account size
futures newbie question (head in sand), how do you trade more contracts using less margin.
Is that even possible?
Reviewing that contract, current Margin Requirements Intraday Initial: 1500.00 Intraday Maintenance: 1200.00 Overnight Initial: 1500.00 Overnight Maintenance: 1200.00
I would have thought, if i wanted to buy two contracts, and hold overnight, it would cost me $3k through IB? (i.e. 1,500 times two).
Margin is just the cash you need in your account to open the position, it's not actually an upfront cost.
Let's say you want to trade a single contract of wheat, you need at least $1500 in your account to initiate the trade. If your position moves more than $300/120 ticks against you, your account balance would fall under the maintenance margin and you get hit with a Margin Call so you need to top up your account to get back to at least $1200.
These requirements set the maximum leverage you can use. Obviously 120 ticks isn't a big margin for error so you wouldn't have just $1500 in your account in the first place.
Intraday vs overnight is just the different requirements (not additive) for intraday vs overnight trades; typically overnight would require more margin because prices can gap btwn sessions.
A $1 move would be almost a 50% move in copper... You aren't grasping this at all. These aren't stocks that move by a penny, they move by ticks.
I know its a 50% move. IMO, we may see that kind of move into 2018/19. That's why I'm wondering how much it would be worth in $$$$. That said, I'd be looking more towards the short side now for copper - especially if it cracks the $2 level!
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