A reduced margin brokers offer for futures positions that are closed before the session ends, sometimes as low as a few hundred dollars per contract.
Intraday margins of $500 or less on es let small accounts control $250,000 of notional-value. This is the source of most futures blowups: the margin is tiny but the tick-value and leverage are not.
Positions held past the broker's cutoff time revert to full initial-margin, and the broker will liquidate if you cannot cover it.
Example: with $2,000 and $500 day margin you can hold 4 ES contracts. A 10-point move against you ($2,000) wipes the account. Sizing by margin instead of risk is the mistake.
Original diagrams for the ideas on this page. Illustrative, not real market data.
Margin and leverage. A $5,000 deposit can control a $100,000 position, which is 20:1 leverage. Because the loss is measured on the full $100,000, a 2.5% move against you halves the deposit and brings a margin call, and a 5% move uses all of it.
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