Margin requirements are not being raised to 100%, people... I...

Margin requirements are not being raised to 100%, people... I now quote from kid dynamite:

"Note the phrasing of the CME’s announcement: they used “initial/maintenance” ratio. Now, the initial margin is almost always larger than the maintenance margin (initial margin is how much collateral you have to post when you buy the contract. Maintenance margin is lower because otherwise you’d have to replenish your margin every time the contract falls in value – instead you only have to do it when you reach certain “maintenance” thresholds).

So the initial/maintenance ratios were previously greater than 1.0. They are being LOWERED to 1.0. There are two ways for this to happen, obviously: 1) Raise maintenance margin requirements or 2) lower initial margin requirements. If the CME was hiking maintenance margins across the board, it seems that they could have more accurately used the term: “maintenance/initial” ratio to describe the change."

Full article here: http://kiddynamitesworld.com/the-cme-margin-notice-that-has-everyone-in-a-tizzy

have a read. It means that margins have have had their volumes changed in relation to each other (initial - maintenance margins) not financial Armageddon...

Here's hoping that the millions of brainless sheep holding equities in PM's get some sense into them before a sell cascade starts on Monday... All it takes is one badly placed bullet to start a war...


Zoltan.

PS: If you are a cool headed, intelligent investor with a good trading plan and an open mind, the above "brainless sheep" comment DOES NOT apply to you.