gerardplauche":juyc1jwz said:
Correct. This year I am heavily into crude oil. I am somewhere around 12% long as of today. I plan on riding it out in August.
The New York Mercantile Exchange, the major U.S. market for metals and energy commodities, on Thursday raised margins for six key energy and metals futures, including copper, coal, gasoline and heating oil. The Tokyo Commodity Exchange took a similar action on platinum futures, which hit a record in New York Thursday.
Margins refer to the money traders are required to set aside to establish a futures position, a minimum cash requirement similar to a down payment. They often get jacked up when prices jump or swing wildly.
"Nymex constantly evaluates futures contracts and their margins...to allow our users to manage their risks properly," said Brenda Guzman, a spokeswoman for the futures market. "It's something that we continuously update, and most likely have to do" if the market gets volatile.
Prices of commodities futures have ricocheted in the past two months. On Wednesday, crude oil closed at a new high of $100.74 a barrel, surpassing levels hit at the start of the year and capping a run from this year's low of $88.11 on Feb 7. Other commodities have also made steep runs in both directions since the start of the year.
Nymex didn't change margins for crude oil futures. The current crude-oil margin is about $6 a barrel for non-member customers. For a commodity that can drop more than $3 in one day, the margin seems relatively low, analysts said.
Nymex is "definitely evaluating" crude futures and could change margins in the futures, Guzman said.
Raising margins could force traders to liquidate their positions to meet higher requirements, thus increasing selling pressures in commodities, said James Williams, an economist at WTRG Economics, an energy research firm.
Major energy and metals commodities moved lower across the board on Thursday.
