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Day Trading/Futures leverage & API/DMA


Dear Mark,
Sorry for giving you loads of personal belief in my last question.
I have only questions this time.

1. If an E-Mini S&P contract's initial margin is $4600 while its maintenance margin is $3600 to control $102500 worth of notional value (~22x leverage, from 102500/4600), then doesn't that mean if the notional value declines more than 0.97% [from (4600-3600)/102500] I would receive margin call? If so, then doesn't that mean such arrangement gives ~22x leverage on the upside but ~103x leverage (from 100/0.97) on the downside? I am still learning.

2. Do you know of any reliable broker that provides API trading? Does API trading normally come with DMA as well?

Hi Choo,

The initial margin is the amount you need to trade 1 contract. The maintenance margin is the minimum that you need in your account to hold the position without a margin call.

I believe you're making things way too confusing. :) 1 point in the e-mini S&P is worth $50. So if you place a trade and have $4600 you can trade 1 contract. If your account drops by more than $1000 (20 points whether or not you are long or short) you would need to bring your account up to the maintenance level of $3600 (or whatever your broker requires to avoid another margin call).

APIs are more popular with Forex and since I'm not trading Forex, and since I trade directly with my broker trading platforms, this is something I don't have much knowledge on.

Once again I'd encourage you to try a demo account with a futures broker. You won't risk anything on a simulator and you'll be able to answer quite a few questions with a little practice!


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Mark Hodge


Questions related to technical analysis, strategies, risk, trading plans, trading psychology and money management. Experience in trading all markets and time-frames with expertise in futures (e-minis, currencies, commodities) and equity options. Unfortunately I am not allowed to offer any specific trading advice (i.e. should I go long the E-mini S&P today).


I have been involved in the industry since 1995 working for Morgan Stanley Dean Witter and American Express Financial Advisors before becoming a full time trader. As Head Education Coach with Rockwell Trading I have coached hundreds of students around the world to achieve their trading goals with simple strategies, a sound trading plan and proper money management for the leveraged markets.

Currently serving as Rockwell Trading's Head Education Coach and moderator for Rockwell's Student Trading Room where we follow opportunities in the minis, interest rates, currency and grain markets daily.

Technical Analysis of Stocks & Commodities, "Day Trading With Volatility", June 2010 SFO Magazine, "Home on the Range: Lasso Trades Without Time", August 2010 SFO Magazine, "Day Trading Indicators, Part 1", January 2011 SFO Magazine, "Day Trading Indicators, Part 2", February 2011 SFO Magazine, "Technical Strategy", April 2011 SFO Magazine, "Advanced Trading Techniques - Futures Spread Trading", October 2011 Active Trader, "A Simple Day-Trading Strategy", November 2011 Marketplace Books, How to Trade Commodities: Simple Strategies for Gold and Crude That Traders Can Use in Any Market, June 2011

Formerly licensed as a financial advisor with Series 6, 7, and 63 licenses. B.A. in Organizational Communications with a Business Minor from California State University, Sacramento.

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