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Margin requirements for 10-year treasuries seem too high


Lunar

Question

Is there a problem with how much margin is required for CFDs on 10 year Treasuries? To buy or sell one contract (the $2 contract) more than $5000 of margin is required. That's more than I have available, but I'm sure I've traded CFDs on them before. Have the margin requirements changed?

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Yes the margin seems far to high - it is margining based on the underlying futures notional, not the actual risk. For example a 1bp move in treasury yield is 8.3pts in the decimal of the future price, i.e. 1 full $10 contract is only $83 per bp, a normal day could be only 4bp, the margin seems far to high for these contracts. I see the same with Bunds.

Bloomberg states initial margin for 10yr USTs is only $1.5k per contract (100k face value notional / $10 per point).

Also, I have noticed that even with a guaranteed stop in place the margin does not decrease to what the contract specifications say it should (size * contract size * stop distance + guaranteed stop premium).

Can someone from IG please take a look at this, it is impossible to trade rates/bond futures using these margins.

Thank you

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