Wheat Futures Margins

(KCBT Exchange Margin Requirements)

Speculative Account - Speculators perform the crucial role in any futures market of assuming risk from hedgers. These investors neither own nor plan to own commodities, but hope to profit from price changes in the futures contracts they buy and sell.

Initial: $2,500 (The initial margin is the amount of money that needs to be in the account to initiate a trade in the wheat futures market.)

Maintenance: $2,000 (The maintenance margin is the minimum equity that must be maintained in the account. If the equity drops below the maintenance margin, a deposit must be made to bring the account back up to the initial margin.)

Hedge / Member Account - Hedgers are typically those that handle and process wheat, and whose inventories are subject to price change. They use futures contracts to minimize the risk of price change, a procedure called "hedging."

Initial: $2,000 (The initial margin is the amount of money that needs to be in the account to initiate a trade in the wheat futures market.)

Maintenance: $2,000 (The maintenance margin is the minimum equity that must be maintained in the account. If the equity drops below the maintenance margin, a deposit must be made to bring the account back up to the initial margin.)

We cannot guarantee the accuracy of the margin requirements written above. Margin requirements are set by the exchange and are subject to change at any time. For current margin requirements please check with your broker or the Exchange where the commodity trades.

Click on the link above to download a very informative .pdf brochure entitled "Grain and Oilseed Hedger's Guide." It was published by the CME Group. This is a must read guide for any novice or advanced trader considering an hedge in the hard red winter wheat market using exchange traded KCBT wheat futures and options.

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