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What are Day-Trading Margins?

Background Info:
Day-Trading eminis (S&P 500)

Hi, I'm a little confused about all of the fees involved in day-trading. I am thinking about going with Mirus Futures (mirusfutures.com) as my brokerage company. So far, I have seen 2 fees that I must pay Mirus Futures when trading. those fees are Commissions & their Day-Trading Margins (price per contract). I understand that the commission is the small amount I pay every time I trade a contract ($2.10 per trade). What I don't understand is what exactly the day-trading margins are. their lowest day-trading margin is $500 per contract. Does this simply mean that I am allowed to trade 1 contract at a time for $500? and then if I want to be able to trade 2 contracts at a time it will cost me $1000? and so on and so on... but then it says as a kind-of side-note, that some traders recommend $5,000 to $15,000 per contract. What do the higher prices change?

After talking to a friend, he says that he pays $500 per contract and that 1 point equals $50. now, going back to the side-note. If I pay $5,000 per contract does that change the point value to $500?

Am I correct at all about the information I just gave?

PS: If you need to know any additional information from me, then please reply to the question and I will provide the additional information in an Edit on the question.

Margin is the ability to borrow against cash and/or securities in your trading account in order to purchase more. Day trading margin accounts allow for 4-to-1 leverage intraday, and 2-to-1 leverage overnight against the cash held in the account. this gives the active trader access to the double-edged sword of leverage, generating profits and losses at a much faster pace. although swing trading stocks and holding overnight on borrowed funds costs interest, day trading on margin doesn’t cost a thing.

Hi Shane...

Yes, you are correct with your understanding. and that is what has been regulated in derivatives markets such as Futures, Forex, Commex (Commodity), Options and the other "contract" based trading.

IF some traders recommend you USD5.000-15.000, they actually want to help you...Why? If you enter a position with very small "endurance" (or your deposit), so you are in harmful position because IF the market is not in-line with your forecast, you will suffer some serious losses, then the Brokerage will notice you "a margin call" and if you don't react appropriately, the Brokerage will impose to "close-out" your trade automatically without further warning. The reason is that the Brokerage doesn't want you to loose all of your money (they protect you from further looses)

PIP or POINT is used to track the moving price. It is common in derivatives such as Futures, Forex and Commex. say, in Forex, If EUR/JPY is now priced at 113.48 then become 113.80 in three hours later, it means that the price has moved 32 Pips or points. If you enter at a specific value/unit depending onto your money deposit and, say, as a result 1 PIP = USD1, that means that you have profit USD32 or vice versa.

Hope this will add you some values

SIG
http://foropts.webs.com/ (my trial website..please have time to visit)

What are Day-Trading Margins?

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