How Much Cash Do I Need To Start Trading In The Futures Market?

To open a trading account, the minimum most brokerage companies will want to see deposited as an opening balance is £1,000, which must be maintained simply to keep your account active. Getting into futures trading therefore requires not only a sizeable float, but also a reasonable amount of working capital to boot.

The minimum balance in a futures trading account is required to carry the futures position on a daily basis. How it works is that each day, money is deducted or added to your account balance relative to how your futures contract performs. If losses bring the account balance below the minimum amount, you will be asked by your broker to top it up. This is known as a "margin call" and responding prevents the broker from closing on your futures position. Of course, in some circumstances, it may be best to ignore the call for more cash and take the hit for the losses.

As a benchmark, it is usually recommended that no more than 10 per cent of total assets be risked on the futures market.