Very intersting stuff thanks, my questions is though which brokers allow traders lower margin requirements for spreads.
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For a one unit spread, we would have $3938 for the single ES and $7500 for the two NQ contracts, for a total required margin of $11,438 before applying the spread credit. The spread credit of 90% reduces the total to just $1,143.80. |
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As you can see, each swing in value was on the order of $6000. With a margin requirement of just over $1000, the potential for profit is excellent on this spread. For example, let's assume an investor capitalizes his position with three times the initial margin requirement ($3431.40) and is able to capture about half of both swings to be conservative, or only $6000 total. That would represent a 174% return on capital. How many day-traders can claim that kind of return? |
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I suppose there aren't many so ROI wouldn't be fantastic but still a nice way to trade.