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the margin mentioned here is called the initial margin requirement. There is a minimum initial margin requirement imposed by the Clearing house. However, that doesn't preclude the futures broking house requiring a higher initial margin requirement.

I would reckon unsecured (no collateral) and online futures brokers as you have mentioned would charge sky high initial margin requirements because they don't want to encounter a margin call inability to meet margin maintenance requirement correction and you can't pay up. A side note, not sure whether you can trade directly with offshore futures broker, it may not be permitted under Foreign Exchange Administration Notice Policy issued by BNM. You may want to check with BNM or local futures broker.

Additional note: If a margin call is triggered means your margin maintenance requirement either completely depleted or very little left.

In short, an initial margin is like a deposit. This deposit maybe adjusted because of Clearing House (i.e. increase in minimum margin), volatility or circuit breaker event (limit up/down event).

(https://www.bursamalaysia.com/trade/risk_and_compliance/bmsc_and_bmdc_as_central_counterparty_ccp/clearing_risk_management/margin_requirement_mark_to_market/derivatives_margin)

Aside from BMD products, my Malaysian futures broker offers Nymex, CME, CBOT and COMEX. Account opening is only RM 10. Drop me a DM, if you are interested.[CODE]

This post has been edited by aurora97: Sep 20 2023, 02:29 PM

Well, rules & regulations are in place for reasons, it could be national policy or risk mitigation.

Malaysian brokers may be outdated but compared to other futures broker, in times of crisis/volatility, who would you want as your broker?

Also, your money is onshore, so easier to get access to it.

Its another tool in the cabinet.

Well, no need to apologize, it is just another solution to compare with. I think any sound minded investor would want to have a solution that is cheap, fast and free (or as close to it)

Of course to compare services between emerging and developed country is like comparing proton versus ferrari. Where low brokerage charge is involved, I would deduce that the futures broker is relying on volume to offset cost incurred, whereas in turn they will ask for higher initial margin.

The higher initial margin works a few ways:

1. to cover the shortfall that the investor may incur for margin maintenance;
2. interest income generated from the initial margin is collected by futures broker to offset cost.

Higher margin may act to offset default risk from the investor but also it becomes an opportunity cost for the investors because you may not be able to deploy that portion of your funds for other investments and you are relying solely on gains from your investment.

On top of that you may have currency conversation losses as well.

Anyway, really depends what angle you are coming from and its better to compare everything to get the best value.