How we can finance margin in commodity futures trading?

Question

What are the Financing methods?
Which are the banks will provide the financing?
How they will provide?

Answer 1

Actually, since they are futures and there is no settlement until the contract comes due, there is no financing required other than the initial margin requirement which is more of a security for the broker that you will pay for any losses incurred. If the security is deposited in the form of t-bills, then you can actually earn interest on the deposit. If the balance falls to a position requiring more margin and you do not provide the margin, he just closes your positions and liquidates the account. Nothing could be more simple.

Answer 2

Please do not take offense to this but you have no idea what you are talking about. You are incorrect about your assumptions between stocks and commodities. If you are not completely sure about what you are investing in and how the market works you have no business placing a trade. Again, do not take offense to this, I am simply trying to save you from losing your money. It appears you got some type of newsletter in the mail or perhaps by e-mail that is promising quick gains in XYZ penny stock. I get these all the time myself. There are no guarantees when it comes to investing. Anyone promising that a stock will go up or down is violating SEC and NASD regulations and could go to jail. It is against the law to make guarantees when it comes to investing because there are none. I suggest you spend a lot more time educating yourself on how the markets work before you place a trade. If you can't do this then hire a reputable financial planner to help you. You will never get the answers you need to make a good investment by asking for help via yahoo answers or any other online forum. It just won't happen. You have to know enough to make the decision yourself, otherwise you are only setting yourself up to fail. I've been trading for over 10 years and I've seen it happen time and time again. Hope this perspective helps.

Answer 3

This is a confusing question. I'm assuming you are an individual investor. There aren't any loans specifically designed for the proceeds to be put into futures accounts. In fact, if that is what you are going to do, you'd be better off not telling the bank about it because that may the bank concerns as to whether the money will get paid back. But there isn't anything stopping you from getting a mortgage or other personal loan, and investing those funds. Of course, if you lose the money in the markets, you still owe the loan balances.

Answer 4

This is typically not something easy to do at the brokerage. To have a margin you have to have a marginable security on deposit. Futures are not marginable as they have no intrinsic value.

Most brokerages will have a different set of risk/experience questions for futures as well to make sure you understand what you are doing.

Lastly, if you are not experienced in trading options, you should not take a loan out to experiment as you are likely to lose the entire amount. My advice would be to use a small amount of funds to get the hang of it and trade your profits.

Answer 5

Scottrade automatically enrolls you in a margin account if you check the box on your application. I use them all the time and I've never had a margin call (came close one).

Answer 6

You should open trading account with brokerage company. And they provide with different leverages.

I could introduce you to brokerage company in Austria. They allow to trade commodities cfd on shares, metals and currencies from the same account. 500 different instruments available.

If you are interesting please pm or e-mail me and I provide you with further details.