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Futures margin requirements can be a low percentage in relation to the size of the futures contract.

Sometimes, you are only putting down 3% or less to profit from the price appreciation/depreciate of the futures contract. Since this may alter the risk profile of an investment where a delta closer to 1 is desired (of your total capital), can MORE of the futures contract be purchased outright? Somewhere between the margin requirement and 100% of the contract?

  • Couldn't you just keep a healthy cash cushion in your account? – Chris W. Rea Apr 17 '14 at 14:49
  • @ChrisW.Rea yes, I was going to write that, but decided not to. As long as the "margin call" is handled in a way that doesn't close the entire position then that works. – CQM Apr 17 '14 at 15:51
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I called a trade desk with one of my firms and got the answer. Just keeping extra cash in the account is good enough for most futures brokers.

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