In This Issue
Note About Risk, Volatility and Margins
Reports and Expiration Notices
The last few days we have witnessed volatility levels that the markets have not seen since July 2003 or even post-Sept. 11th.
Each trader must examine how this increased volatility (in our opinion the stock market has now changed its "personality" from choppy, quiet uptrend into a more nervous and volatile trading environment) affects his or her trading.
Each trader is different and must assess and understand his mental as well as financial risk tolerance.
There are two aspects we urge you to review. The first is your money management and survival; the second is the concept of margin, in theory and in reality.
Survival - This is the key! Do what you need to do in order to survive this brutal business and give yourself the chance of being here down the road with more experience and a better chance of success. Survival is probably the biggest key for beginner traders. There is a saying in this business "live to trade another day" it is so TRUE!
Money Management - While it is closely related to survival, money management can also stand alone. For your own survival, you must set trade/daily/weekly loss limits. Sound money management is closely associated with knowing your risk-reward ratio (per trade and per time frame).
Margin is an extremely important concept both in theory and practice. It can also to help you with money management and survival.
Day-trading margins apply to the amount of money one needs to have in his account for trades that are opened and closed within the same day. Many traders currently have access to trading with day-trading margins of $400 per contract - for example for the e-minis. While this allows for more aggressive buying power, it also increases your exposure in the market.
Overnight margins apply to holding an open position beyond the close at 4:15 p.m. New York time for 1 contract of the e-mini S&P 500 is currently, as set by the Chicago Mercantile Exchange, $3500.00 to be maintained above $2800.00.
Of course, if you have multiple positions you would multiply $3500.00 by the number of contracts that you will be responsible for.
For more information on current margins, visit our live margins page.
These markets are risky and when you leave positions open at the close of the Market at 4:15 pm New York time, you leave yourself and your broker at risk.
At 4:15 New York time you MUST be FULLY MARGINED for any position you hold.
With the recent volatility in stock market indices, we thought a longer term view may be appropriate along with some important price levels.
Click the thumbnail below to view the full-sized weekly chart.
Disclaimer:
Trading commodity futures and options involves substantial risk of loss. The recommendations contained in this letter is of opinion only and does not guarantee any profits. These are risky markets and only risk capital should be used. Past performances are not necessarily indicative of future results. This is not a solicitation of any order to buy or sell, but a current futures market view provided by Cannon Trading Inc. Any statement of facts herein contained are derived from sources believed to be reliable, but are not guaranteed as to accuracy, nor they purport to be complete. No responsibility is assumed with respect to any such statement or with respect to any expression of opinion herein contained. Readers are urged to exercise their own judgment in trading!
Source: Moore Research Center, Inc.
| Date | Reports | Expiration & Notice Dates |
|---|---|---|
| 03/01 Thu |
7:30 AM CDT - Personal Income & Spending(Jan)
7:30 AM CDT - USDA Weekly Export Sales 7:30 AM CDT - Initial Claims-Weekly 9:00 AM CDT - Construction Spending(Jan) 9:00 AM CDT - ISM Index(Feb) 9:30 AM CDT - EIA Gas Storage 3:30 PM CDT - Money Supply Auto & Truck Sales |
|
| 03/02 Fri |
9:00 AM CST - Michigan Sentiment-Rev(Feb)
|
LT: Mar Live Cattle Options(CME)
Mar Frozen Pork Belly Options(CME) |
| 03/05 Mon |
9:00 AM CST - ISM Services(Feb)
|
|
| 03/06 Tue |
7:30 AM CST - Productivity-Rev(Q4)
9:00 AM CST - Factory Orders(Jan) |
FN: Mar Frozen Pork Bellies(CME)
|
| 03/07 Wed |
9:30 AM CST - API & DOE Energy Stats
1:00 PM CST - Fed's Beige Book 2:00 PM CST - Consumer Credit(Jan) |
|
| 03/08 Thu |
7:30 AM CST - USDA Weekly Export Sales
7:30 AM CST - Initial Claims-Weekly 9:30 AM CST - EIA Gas Storage 3:30 PM CST - Money Supply |
LT: Mar Cotton(NYBOT)
Mar Nikkei 225(CME) Mar Nikkei 225 Options(CME) |
* Please note that the information contained in this letter is intended for clients, prospective clients, and audiences who have a basic understanding, familiarity, and interest in the futures markets.
** The material contained in this letter is of opinion only and does not guarantee any profits. These are risky markets and only risk capital should be used. Past performances are not necessarily indicative of future results.
*** This is not a solicitation of any order to buy or sell, but a current market view provided by Cannon Trading Inc. Any statement of facts herein contained are derived from sources believed to be reliable, but are not guaranteed as to accuracy, nor they purport to be complete. No responsibility is assumed with respect to any such statement or with respect to any expression of opinion herein contained. Readers are urged to exercise their own judgment in trading!