Gold Margin Upped 25% effective Tomorrow 06/21/13

VanHalen

CME

vpr

Just an FYI for those who believe that there is some kind of a conspiracy going on. The SPAN system for calculating margins is used by exchanges throughout the world. You could actually read how it works and even purchase the software. If you ran the numbers, it would spit out the same margins that they're posting. When volatility goes up, so do margins because the CME guarantees all transactions and they have to make sure no one defaults. These websites are so incredibly biased, creating and feeding off fear in the public.

mrpaseo

What does that mean?

VanHalen

<< <i>Just an FYI for those who believe that there is some kind of a conspiracy going on. The SPAN system for calculating margins is used by exchanges throughout the world. You could actually read how it works and even purchase the software. If you ran the numbers, it would spit out the same margins that they're posting. When volatility goes up, so do margins because the CME guarantees all transactions and they have to make sure no one defaults. These websites are so incredibly biased, creating and feeding off fear in the public. >>



Conspiracy? With the NSA watching COMEX there's no way for that to happen!

But seriously, upping the margin requirements is to be expected after a $100 drop in one day. All it means is you need more cash to play with when trading, 25% more for next week.

GRANDAM

<< <i>

<< <i>Just an FYI for those who believe that there is some kind of a conspiracy going on. The SPAN system for calculating margins is used by exchanges throughout the world. You could actually read how it works and even purchase the software. If you ran the numbers, it would spit out the same margins that they're posting. When volatility goes up, so do margins because the CME guarantees all transactions and they have to make sure no one defaults. These websites are so incredibly biased, creating and feeding off fear in the public. >>



Conspiracy? With the NSA watching COMEX there's no way for that to happen!

But seriously, upping the margin requirements is to be expected after a $100 drop in one day. All it means is you need more cash to play with when trading, 25% more for next week. >>



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So do the margins rise and fall as prices go up and down or will this higher margin become permenant?

GrandAm

vpr

If volatility drops and prices drop, then margins will drop as well. If volatility goes up and prices drop, margins will rise because the risk of someone defaulting is greater. If prices rise, so will margins because the value of the contract will be more so people need to put up more money to trade.