Free Online Trading Lessons Archives
How to cope with margin calls using options and futures
Learn to manage margin calls in a commodity trading account by reducing position delta and risk.
Margin calls happen to the best of them, but there are often ways to alleviate margin deficits without adding money to the account or liquidating positions. In this class, commodity broker Carley Garner of DeCarley Trading discusses the nature of margin and margin calls while offering detailed strategies of using long and short calls and puts to reduce the margin in a trading account.
Topics covered include:
• What is margin?
• Who sets margin?
• Why is margin necessary?
• How many days do you have to meet a margin call?
• Initial margin vs. maintenance margin
• Day trading margin vs. overnight margin
• Buying calls and selling puts to reduce margin required for short futures
• Selling calls and buying puts to mitigate the exchange required margin for long futures contracts