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CME Lowers Initial ES And Other Key Equity-Related Margins By 12%

Tyler Durden's picture




 

It doesn't get much more obvious than this. The S&P at multi year highs, and what does the CME do? Why it lowers initial (as in please come in and open new positions) spec margin for not only the E-Mini, but virtually every other major market "reflexive" product in existence including S&P, Dow Jones, Nasdaq, and subsector futures currently traded, by 12%. As a reminder, the last time that "other" asset class rose to multi-year highs, that would be gold, it hiked margin nearly every single day, with a culmination of two margins hikes in one day on May 4. Naturally, the margin hiker-in-chief is not as worried about stocks attaining the same bubble status since if anything it will merely cement reelection chances. That said, should WTI ever dare to go up above $100 watch as the CME proceeds to decimate anyone who dares to be long WTI futures on margin.

Full release here:

 

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Thu, 09/20/2012 - 17:18 | 2816290 MiguelitoRaton
MiguelitoRaton's picture

mmm I'm feeling animal spirits bitchez....not!

Thu, 09/20/2012 - 17:20 | 2816297 AlaricBalth
AlaricBalth's picture

"Welcome to my parlor", said the spider to the fly.

Thu, 09/20/2012 - 17:24 | 2816312 LULZBank
LULZBank's picture

Knock yourself out on S&P Bitchezz!!!

Thu, 09/20/2012 - 18:03 | 2816392 NotApplicable
NotApplicable's picture

Bring out your deeeeeaaaaaad!!!! *BONG*

Bring out your deeeeeaaaaaad!!!! *BONG*

Bring out your deeeeeaaaaaad!!!! *BONG*

Thu, 09/20/2012 - 18:37 | 2816446 strannick
strannick's picture

Anyone submitting themselves to having COMEX Lucy pull the football away with increased margins again, deserves to be Charlie Browned on their back. Today COMEX asks traders to please stretch their chicken necks onto the COMEX chopping block. Jeff Christian announced gold to fall to $1550 when there would be no QE3. He is the banks puppet. A ventriliquest smiling wooden marionette with their hand moving his mouth, who still sometimes accidently says the wrong thing, ie. LBMA gold is leveraged 100 times. Dont play their COMEX paper games. Get Physical

Thu, 09/20/2012 - 18:50 | 2816470 jballz
jballz's picture

 

Jesus you guys really need to put this comspiracy theory bullshit about margins to bed. Margins go up and down with volatility. There is no mystery to it.

The S&P being "at record highs" doesn't mean dick, nor should it. The VIX is at multi-year lows. Thus margin can drop. 

You do realizeyou can short ES with the same margin required to buy it, yes? 

Give it up already. It's fucking math.

 

 

Thu, 09/20/2012 - 19:03 | 2816497 akak
akak's picture

Then perhaps you can explain why margins were raised multiple times (and to an unprecedented degree) for both gold and silver, and ONLY for gold and silver, while prices AND volatility for both were falling last year?  And perhaps you can also explain why similar or even higher levels of volatility in other commodities have rarely if ever demanded such a manic degree of margin raising?

When cotton and sugar were radically spiking in price last year, or rice back in 2008, or wheat and corn this summer, I failed to see similar multiple margin hikes, some only one day apart from each other, in ANY of those commodities.

You are a blind fool.

Thu, 09/20/2012 - 22:54 | 2816837 Muppet of the U...
Muppet of the Universe's picture

Do you have any records of the number of times margins were hiked on gold and also silver, versus the number of times they were hiked versus cotton, and the amounts of the margin increases?  I assume I can call CME and ask, but maybe you have info.

 

You also need to remember, that this is an experiment they are believing will end dissatrously, but if they can somehow keep the ship afloat, holy shit, they will be miracle workers.  B/c to risk a collapse is to risk awakening the muppetry.

 

So keeping the dollar intact is important, and gold would literally destroy the dollar.  It was more or less, a matter of global financial stability that gold be suppressed.  Although, if your claims are true then I am astonished.

Fri, 09/21/2012 - 03:45 | 2817079 jballz
jballz's picture

 

douchebag,

 

http://www.cmegroup.com/clearing/risk-management/historical-margins.html

 

No I won't waste the time to cross reference for you as you're premise proves you are brain dead. If you want to take the time to learn something I encourage you to make use of that link on your own time.

 

Then perhaps you can explain why margins were raised multiple times (and to an unprecedented degree) for both gold and silver, and ONLY for gold and silver, while prices AND volatility for both were falling last year? 

 

Easily, your wrong. There has been nothing 'unprecedented' about it, nor were gold and silver the ONLY margin hikes (and cuts), and margins don't go up on falling volatility. Whether prices are going up or down is totally irrelevant to setting margins. It is ONLY a function of volatility. The poster obviously doesn't understand this as the rookie observation of stocks being "at their highs" must imply higher margins. It does not, until compounding gains sufficiently increase the value of the underlying contract.

Or to make it easier for you. Margins. increase. for. short. sellers. too. you. dumb. fuck.

100oz of gold at $400 is $40,000

100oz of gold at $1900 is $190,000

think about it, if you can.

 

 


Thu, 09/20/2012 - 22:32 | 2816788 dexter bland
dexter bland's picture

They also tend to raise margins near the bottom of the market - "heightened risk" and all. Its a way of getting the wood ducks to buy near the top and squeeze them out again near the bottom.

Fri, 09/21/2012 - 03:11 | 2817068 dwayne elizando
dwayne elizando's picture

Nice try dipshit. What will be the excuse when they make it sell orders only?

Thu, 09/20/2012 - 17:19 | 2816296 MiguelitoRaton
MiguelitoRaton's picture

How long before there is a negative margin on the S&P?

Thu, 09/20/2012 - 17:51 | 2816364 Global Hunter
Global Hunter's picture

that comes AFTER the pension fund appropriations

Thu, 09/20/2012 - 17:57 | 2816376 Daily Bail
Daily Bail's picture

MUST SEE: 'Mind If I Violate Your 4th Amendment...'

How many fucking checkpoints in one morning...

Thu, 09/20/2012 - 18:23 | 2816432 Jstanley011
Jstanley011's picture

Yeah, I-8 runs right next to the Mexican border, duh.

Thu, 09/20/2012 - 17:19 | 2816298 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

There is a turd in the pool but the lifeguard says keep swimming.

Thu, 09/20/2012 - 17:21 | 2816303 slaughterer
slaughterer's picture

WTI LONG Forever.  Fuk CME and Obummer.  

Thu, 09/20/2012 - 17:22 | 2816307 Mark Carney
Mark Carney's picture

lol

Thu, 09/20/2012 - 18:21 | 2816428 tenpanhandle
tenpanhandle's picture

Not to worry,  the sharks will eat the turd.

Thu, 09/20/2012 - 19:22 | 2816519 High_Pockets
High_Pockets's picture

"Spalding, nooooo!"

Thu, 09/20/2012 - 17:24 | 2816310 Top_Kill
Top_Kill's picture

If only they could lower margins on jobs...

Thu, 09/20/2012 - 17:25 | 2816311 Schmuck Raker
Thu, 09/20/2012 - 19:00 | 2816492 Manipuflation
Manipuflation's picture

+1  I was thinking along the same lines but had this famous tune in mind.  Also especially good when played as background music simultaneously with one of those other slow motion Nanex HFT vids on you tube.

http://www.youtube.com/watch?v=MK6TXMsvgQg

Thu, 09/20/2012 - 17:25 | 2816313 richard in norway
richard in norway's picture

flash crash being planned

Thu, 09/20/2012 - 17:31 | 2816330 surf0766
surf0766's picture

they are trying to push it to 15K before the election. This is their last chance. 100 years of progressive planning on the line.

Thu, 09/20/2012 - 17:42 | 2816356 Rainman
Rainman's picture

hooray......financial repression to infinity...Obama for Dictator !

Thu, 09/20/2012 - 17:47 | 2816359 spankthebernank
spankthebernank's picture

They'll be happy with 14000 and they will get it if this volume malaise continues....after November, all hell breaks loose.

Thu, 09/20/2012 - 17:26 | 2816317 lolmao500
lolmao500's picture

It should always be 100% margin. Don't have the money? Fuck ya!

Thu, 09/20/2012 - 18:26 | 2816433 razorthin
razorthin's picture

xactly.  the credit-growth myth.

Thu, 09/20/2012 - 17:27 | 2816320 grid-b-gone
grid-b-gone's picture

Buying buyers (bagholders) on margin.

Thu, 09/20/2012 - 17:27 | 2816321 caimen garou
caimen garou's picture

No matter what you do bend us all over bernake, it wont work!

Thu, 09/20/2012 - 17:29 | 2816323 fuu
fuu's picture

KING STAWKS RAH RAH!

Thu, 09/20/2012 - 17:33 | 2816337 Piranhanoia
Piranhanoia's picture

the Dukes know something,  let's get in on it.

Thu, 09/20/2012 - 17:33 | 2816338 Seorse Gorog fr...
Seorse Gorog from that Quantum Entanglement Fund. alright_.-'s picture

Guns n gold! This dude sounds like some of us...

 

http://www.mail.com/int/video/topvideos/1571630-surprise-discovery-nv-re...

 

Lesson: don't just hoard.

Thu, 09/20/2012 - 18:30 | 2816440 tenpanhandle
tenpanhandle's picture

ooooh. oooooooh, a conspiricy theorist, a hermit, a nutcase. ooooooh.  And while we are denigrating his memory, we might as well denigrate his coins and turn their uncirclulated condition into circulated.  Fucking idiots.

Thu, 09/20/2012 - 19:44 | 2816553 seek
seek's picture

There are some other stories about this. A couple things -- he kept a ledger and receipts, so they know the basis. The really weird thing is the IRS is claiming taxes are $750K, which does not compute at all. They found a single relative, a first cousin, who gets the balance after taxes.

With just a little planning -- a couple letters, each holding the decoding instructions for the other, left with attourneys -- his stash could have been secure and passed on beneficiaries without so much notoriety. Plan ahead, people!

Thu, 09/20/2012 - 17:34 | 2816340 Sutton
Sutton's picture

CHICAGO mercantile exchange

Thu, 09/20/2012 - 17:35 | 2816344 AL_SWEARENGEN
AL_SWEARENGEN's picture

CME COCKSUCKERZ!!

Thu, 09/20/2012 - 17:35 | 2816345 Gringo Viejo
Gringo Viejo's picture

Like the poker player with the biggest bankroll that consistently gos all-in, eventually the hand will be called.

Thu, 09/20/2012 - 18:29 | 2816434 Bunga Bunga
Bunga Bunga's picture

...

Thu, 09/20/2012 - 17:38 | 2816351 slaughterer
slaughterer's picture

HOARD GOLD, SILVER, GUNS, PORK, PORN, IPA BEER, BEANS, RICE, CORN, OIL, WHEAT, COWS, FARMLAND, ZH POSTS, TITS--this shit is going UP!   

Thu, 09/20/2012 - 18:42 | 2816435 Bunga Bunga
Bunga Bunga's picture

But only the NK603 roundup-resistant one. They can take your guns but not the corn.

Thu, 09/20/2012 - 21:10 | 2816665 Colonel Klink
Colonel Klink's picture

So you mean the one that causes cancer?!?!

Thu, 09/20/2012 - 17:41 | 2816355 Meesohaawnee
Meesohaawnee's picture

heck why stop with the manipulation now.??

Thu, 09/20/2012 - 17:56 | 2816373 gunsmoke011
gunsmoke011's picture

So obvious - who the heel do they really think they are kidding? The sad truth is - it will probably work. Stock Market making new ATH - with Real Unemployment at 16%, Negative Earnings for the S&P and 16 Trillion deficit. Obama will look in the camera and say he inherited the worst economic depression in history - and because of his leadership - the stock market has fully recovered and we are on our way to a 1000 year new world. AND PEOPLE WILL BUY IT!! Things are so fucked up right now that the only way things are going to change is through the end of a gun barrel - not an electronic ballot that will probably get manipulated anyway.

Thu, 09/20/2012 - 17:56 | 2816375 tmosley
tmosley's picture

Fuck, there are still people in the markets?

Thu, 09/20/2012 - 18:03 | 2816390 Dr. Engali
Dr. Engali's picture

It's too bad Corzine didn't run the CME.

Thu, 09/20/2012 - 18:08 | 2816409 surf0766
surf0766's picture

Where is Johnny? Not at the convention. Not in public. What could he be hiding from?  Where is the Veep telling us they still call on Johnnie?

 

Thu, 09/20/2012 - 18:06 | 2816399 Meesohaawnee
Meesohaawnee's picture

zerohedge is the greatest. i didnt check cause i just cant stomach yahoo finance and bubblevision but i doubt they are reporting it.

Thu, 09/20/2012 - 18:07 | 2816403 buzzsaw99
buzzsaw99's picture

stocks can't go down until bag holders are found

Thu, 09/20/2012 - 19:07 | 2816503 akak
akak's picture

 

stocks can't go down until bag holders are found

Thank God you did not include the word "silver" in your comment as well, or you would have summoned the ghost of Trav7777!

Thu, 09/20/2012 - 18:07 | 2816404 FiatFapper
FiatFapper's picture

How low can you go?

Banksters – The Great Con Game

Thu, 09/20/2012 - 18:10 | 2816412 JohnKozac
JohnKozac's picture

It's a Bubble.

Thu, 09/20/2012 - 18:18 | 2816422 Awakened Sheeple
Awakened Sheeple's picture

You've got to be suicidal to buy anything on margin right now!

Thu, 09/20/2012 - 18:30 | 2816437 sessinpo
sessinpo's picture

Yea dude. It is crazy. Even shorting the market on margin is tough which is why I have kept a very small position.

Thu, 09/20/2012 - 18:20 | 2816426 Catullus
Catullus's picture

So when the price is at multi-year highs we lower margins? That makes so much sense. I would have thought it was the other way around. I don't know why I would have thought that. Maybe we can sweet PR woman from the CME to explain it to us. Anyone have her email?

Thu, 09/20/2012 - 18:29 | 2816439 sosoome
sosoome's picture

I just love bubbles

Thu, 09/20/2012 - 18:30 | 2816441 Heyoka Bianco
Heyoka Bianco's picture

The CME always gives me a strange tingling in the "margin" betwixt me buttocks.

Thu, 09/20/2012 - 18:34 | 2816448 sessinpo
sessinpo's picture

Funny. I always had a strange feeling when I traded the Nymex and CSCE decades ago. Even back then, I felt like I was being front runned guys on the floor. I hated doing any business in NY.

Thu, 09/20/2012 - 18:31 | 2816445 Bunga Bunga
Bunga Bunga's picture

When they have to ship all that printed money railways will go up too.

Thu, 09/20/2012 - 18:37 | 2816450 silverserfer
silverserfer's picture

this is a shitty deal theyre not even sereving free cocktails.

Thu, 09/20/2012 - 18:56 | 2816483 XtraBullish
XtraBullish's picture

When are you schmucks going to realize that Bennie has a 8 quadrillion dollar margin excess and likes the market because it is undervalued. Try to short into an 8 quadrillion bid. Never underestimate the replacement power of equities within a Barnancke-esque Ponzi-driven buying binge. Don't fight the Fed and don't fight the tape. End of friggin story.

 

Thu, 09/20/2012 - 19:16 | 2816515 Manipuflation
Manipuflation's picture

Breaking News:  Chicago Mercantile Exchange to change symbol from CME to MPTFKR.

Thu, 09/20/2012 - 20:35 | 2816623 Papasmurf
Papasmurf's picture

Run Forest, run!

Thu, 09/20/2012 - 21:35 | 2816687 Platinum_Investor
Platinum_Investor's picture

This is the most F'd Fuck thing I have ever heard.

World economies are crumbling yet the US is encouraging people to pile into stocks at a 5 year high.

This is incredible.

Thu, 09/20/2012 - 21:50 | 2816712 LithiumWarsWAKEUP
LithiumWarsWAKEUP's picture

 Maybe they want to make more commissions, from the flock that is already squeezed! Don't think for a minute it is ALL about 'being long'. They just want traders in the game. Only SKILL wins...fwiw.

Thu, 09/20/2012 - 21:45 | 2816699 LithiumWarsWAKEUP
LithiumWarsWAKEUP's picture

last Qtr. o/n margin for the /6E was $4,050 per contract. Now changed to $3,300. If you really want asssraped play with the /E7, the mini-Euro. It was $2,050 (I think) and now $1,650. Oh, if your broker mentions. 'it doesn't have much liquidity", take it to heart. They will get you 6 pips both directions when you really want out, or in. Stay with the Big one. http://www.cmegroup.com/clearing/margins/#e=CME&a=FX&p=EC

Thu, 09/20/2012 - 22:28 | 2816785 Meesohaawnee
Meesohaawnee's picture

why wouldt ya just HIKE crude??

Thu, 09/20/2012 - 22:32 | 2816789 DollarDive
DollarDive's picture

Maybe performance bond requirements were changed because the volatility in the markets has thrown some firms out of compliance with Futures and Options settlements coming tomorrow ? 

Fri, 09/21/2012 - 01:54 | 2817033 muppet_master
muppet_master's picture

odummernomics casino

needs some muppets !! come on muppets use margin to join the corzine-madoff-kenyanomics ponzi scheme.  we'll show you a 1% gain...followed by a -20% sell-off

Fri, 09/21/2012 - 05:52 | 2817120 tocointhephrase
tocointhephrase's picture

Pull my finger!

Edit: You don't pull on superman's cape 

You don't spit into the wind 
You don't pull the mask off the old lone ranger 
And you can't fuck with me and my men 

Boom bit competition ain't shit 
Fakin the funk like silicon tits  HERE COME THE GRAVEDIGGAZ!

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