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As an equity trader, have you ever been locked out of trading due to a day trading violation? Or have you missed an opportunity due to short selling restrictions?

Missed opportunities can be costly, so we will look at some of the restrictions for day trading cash equity products and compare that to day trading with futures.

The Power of Leverage

Leverage can seem risky, but when used properly it is a game-changer. Leverage is the ability to control a large contract value with a relatively small amount of capital. In the futures market, that capital is called performance bond, or initial margin, and is typically 3-12% of a contract's notional or cash value.


Assume that one E-mini S&P 500 future has a value of $103,800. You initiate a position by posting an initial margin of at least $5,060. In other words, you will have exposure to $103,800, but you have only put down a small percentage of the value. This is called greater capital efficiency.

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