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In response to the spike in volatility, CME Group (CME) says it's raising collateral...

In response to the spike in volatility, CME Group (CME) says it's raising collateral requirements for trading in benchmark gold, silver and other precious metals futures contracts, effective at the close of business Tuesday. Margins to trade Comex 100-troy ounce gold futures will be increased by 19%, silver will increase 18%, palladium 14% and platinum by 19%. Natural-gas futures will also increase 5.6% as well.
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Comments (16)
  • New Low Observer
    , contributor
    Comments (2150) | Send Message
     
    Time for the collapse in commodities to really get started. With these increased requirements we're going to see a firm go out of business MFGlobal or Peregrine style.
    15 Apr 2013, 08:12 PM Reply Like
  • Matthew Lewis
    , contributor
    Comments (405) | Send Message
     
    Shorts use margin too.
    15 Apr 2013, 08:21 PM Reply Like
  • Robert Duval
    , contributor
    Comments (6212) | Send Message
     
    Did'nt you see? Only applies to long exposure.
    15 Apr 2013, 09:02 PM Reply Like
  • tough times
    , contributor
    Comments (57) | Send Message
     
    is capitulation/cascading on cards ?

     

    Both longs and shorts use margins. I hope, this bubble in this metals busts once and for all. All hedgies,big guys, first rode up on long side and now on onside.

     

    Time to stay out n watch form sidelines !
    15 Apr 2013, 08:25 PM Reply Like
  • kingdoms333
    , contributor
    Comments (18) | Send Message
     
    Certainly time to be steady and full of wisdom! Cash at the moment looks even better. There could be some big hedge funds, etc. blow up particularly if this swings over into the equity markets....which I think is very very likely. We may see that 20 - 40 % correction possibly!
    15 Apr 2013, 11:48 PM Reply Like
  • youngman442002
    , contributor
    Comments (5131) | Send Message
     
    you knew they were going to pile on....for the fiat to live..gold and silver has to die...
    15 Apr 2013, 08:36 PM Reply Like
  • Matthew Lewis
    , contributor
    Comments (405) | Send Message
     
    Makes no sense. Like I said, margins go up for shorts too.
    15 Apr 2013, 09:33 PM Reply Like
  • DaLatin
    , contributor
    Comments (1522) | Send Message
     
    Now the Centrals will contract for the mega amounts of bullion they want and need.We will have to track Dubai over the next few months and see the amounts !
    15 Apr 2013, 08:56 PM Reply Like
  • JohnBinTN
    , contributor
    Comments (4029) | Send Message
     
    100%+ collateral should be required to trade commodity futures.
    15 Apr 2013, 09:12 PM Reply Like
  • Paulo Santos
    , contributor
    Comments (24957) | Send Message
     
    Coup de grace on levered longs ...
    15 Apr 2013, 09:47 PM Reply Like
  • James A. Kostohryz
    , contributor
    Comments (5933) | Send Message
     
    People that play with fire will usually get burned. This fiasco has further to go. Will be publishing an article tommorrow AM on Seeking Alpha on Gold.
    15 Apr 2013, 11:32 PM Reply Like
  • STDvooh
    , contributor
    Comments (641) | Send Message
     
    Less margin trading, less air in commodity prices. All good.
    15 Apr 2013, 11:47 PM Reply Like
  • SoldHigh
    , contributor
    Comments (1013) | Send Message
     
    100% cash (no margin) for commodities would reduce the speculation aspect and probably decrease volatility.
    16 Apr 2013, 12:22 AM Reply Like
  • jameswright44
    , contributor
    Comments (2) | Send Message
     
    I don't think stocks and gold dropped because of some bad macro data. I think gold dropped for other reasons(Cyprus and rotten returns recently) and stocks dropped because people had to sell stock to meet margin calls. When gold stabilizes buy the S$P.

     

    Am I thinking incorrectly about this. Let me know.
    16 Apr 2013, 02:12 AM Reply Like
  • DeepValueLover
    , contributor
    Comments (9719) | Send Message
     
    This is a classic technicals crash.

     

    Once the stops were taken out @ $1500 the pressure on $1400 became intense.

     

    The programs went bonkers @ $1400 and down we went.

     

    The near term bottom will be ~$1280.
    16 Apr 2013, 03:54 AM Reply Like
  • LPW2000
    , contributor
    Comments (2) | Send Message
     
    No margin for futures? OK, no margin when you buy your home; cash only. No margin? OK, no margin accounts for the small investor at Fidelity and Schwab; cash only. Credit cards? No, that's huge margin, you put up nothing. (That would be called infinite margin, academically speaking.) Margin accounts are backed by Letters of Credit and Clearing Members' balance sheets.
    16 Apr 2013, 06:13 AM Reply Like
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