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Limit Orders and Margins on Futures


#1

May I know why limit orders are considered towards futures margins? These are unfilled orders. I placed some limit targets are far out and the margin requirements are the still the same.


#2

This is because Limit orders that are NOT offsetting trades are considered though they are filled. Let’s assume you trade Gold Futures (GC), and you place 4 limits orders stack one underneath the other. If there is, for example, a sharp market drop, then all your contracts could be filled. Therefore, margins need to be calculated according to your accounts ability to absorb the total margin requirement.

Limit orders that are profit targets and are offsetting trades should not affect margins.

Thank you,
Matt Z
Optimus Futures Support


#3

ah! makes sense. The same logic would apply to stop orders?


#4

Correct! Stp orders become market orders so initial stop orders (not offsetting) will go towards margin.

Note: The placement of contingent orders by you or broker, or trading advisor, such as a “stop-loss” or “stop-limit” order, will not necessarily limit your losses to the intended amounts, since market conditions may make it impossible to execute such orders.