Stocks and Commodities Magazine

Newly established margin requirements for FCM's and their effect on Commodity margin calls

The CFTC has recently implemented new margining rules for FCMs (Futures Commission Merchants), how does this impact retail traders in regards to margin calls?

Although it has been nearly three years since the collapse of futures giants, MF Global and PFGBest, the commodity industry continues to feel wakes in the aftermath. Since their demise, regulators have been tirelessly drafting and implementing safeguards aimed at protecting futures traders from brokerage firm risk.

In light of the aforementioned events the rules that worked well for decades were suddenly deemed inadequate. Unfortunately, as we learned as children on the playground and repetitively throughout our lives, a few bad apples ruin it for the rest. I say this because the same rules, rightfully, aimed at protecting customers, will likely force several brokerage firms, known as FCMs, or Futures Commission Merchants) out of the business due to enhanced compliance burdens.

The entirety of the new CFTC rule is in excess of 600 pages; we are going to focus on a small but impactful part of the rule known as the “Residual Interest Rule”.

What is the Residual Interest Rule?

Before we can discuss the Residual Interest Rule, we must have an understanding of what residual interest is.

Read more on possible changes to margin calls based on new regulation in the February 2015 issue of Stocks & Commodities Magazine





DeCarley Trading on Twitter

Carley Garner Trading Books

  • Higher Probability Commodity Trading, new Carley Garner book

    Higher Probability Commodity Trading, new Carley Garner book

    According to Phil Flynn, Fox Business News contributor, this is Carley Garner's "masterpiece"! Order from Amazon today! "A great read for both beginner and advanced commodity traders. Carley nails the seemingly impossible task of leveling the playing field by imparting vital concepts in easy to digest bites ...she doesn't leave out the harsh realities and heartbreak many overzealous speculators face." -- JON NAJARIAN, co-founder "I love the book... it's an MBA in trading for the
    Read More
  • Commodity Options the Book

    Commodity Options the Book

    It isn't free, but it's close! If this book saves you 2 ticks, you've recouped your investment.   Commodities are hot, as Jim Rogers would say.  Stagnant stocks and the massive bull rally in raw commodities have lured much of the attention away from Wall Street and toward down-town Chicago.  It is difficult to turn on the television or open the newspaper without being reminded of the impact that commodity prices have on our daily lives.   Traders
    Read More
  • A Trader's First Book on Commodities

    A Trader's First Book on Commodities

    The Simple, Practical, 100% Useful How-To Guide for New Commodities Traders   Before you trade commodities, you'll need significant practical knowledge of the associated risks and market characteristics. That's where this book comes in. You won't find boring theory or bewilderingly complex trading strategies here. Instead, you will find specific guidance on accessing commodity markets cost-effectively, avoiding common beginners' mistakes, and improving the odds of successful trades. Drawing on her extensive experience teaching traders, Garner shows how to
    Read More
  • Currency Trading in the FOREX and Futures Markets

    Currency Trading in the FOREX and Futures Markets

    Get a copy of Carley Garner's latest book at, or any major outlet! "Once again, Carley Garner demonstrates her ability to boil down complex concepts for individual traders. Trading Currencies in the FOREX and Futures Market will put budding currency traders ahead of the curve with its unique blend of the basics and some refreshingly unexpected material." ~ Karris Golden, Traders Press® "Carley is a smart trader and broker; she understands the markets and the importance of
    Read More

Newsletter Trial