• All that glitters must meet margin requirements.gold plates image by peter Hires Images from Fotolia.com
  
  If you are considering buying or selling metals futures, which are traded on the COMEX, you will need to know the margin requirements for the metal you wish to trade. Margins, as in all futures trading, are the good faith deposit required by an exchange and its clearinghouse to facilitate the seamless operation of the marketplace. Exchanges specify both initial margin and maintenance margin rates, so make sure you are aware of both types. If your equity falls below the maintenance margin, you will have to restore it to the prescribed levels.
  
  

COMEX Metal Futures

• COMEX, together with NYMEX, provides a metals derivatives marketplace under the CME umbrella group for precious and base metals such as gold, silver, copper, steel and uranium. It is important to read the contract specifications for each product, as the exchange's margin requirements will vary, not only based on current market conditions, but depending on whether you purchase a futures product "outright" (as is, standalone) or as an intercommodity (one commodity vs. a different commodity) or intracommodity (i.e., one type of gold vs. another type of gold). Margin rates will also vary depending on whether you are a member of the exchange, a hedger or a speculator. Hedgers and members receive a discount.
  
  

Initial & Maintenance Margin

• Before jumping into metal futures, know what may be expected of you. If the markets take a turn and there is not enough equity to cover the adverse move, you may receive a margin call from your broker to make up the difference--otherwise your position could be liquidated.
  
  Hedgers approach the market with a view to protecting their positions. Speculators are primarily out to make a profit. Depending on your approach, you will be subject to different margin regulations. In some cases, initial and maintenance margin are the same. So while a gold hedger may have to establish an account with a margin of $4,251, he will have to make sure his account does not dip below that amount; whereas a gold speculator will have to start with a margin of $5,739 and maintain a margin of $4,251. Be aware that margin requirements are subject to change, so keep them up to date.
  
  

Margins for Gold, Silver and Copper Futures

• All contract specifications are not created equal. As of August 2010, for gold futures, for example, your initial and maintenance margins for gold as a speculator would be $5,739 and $4,251, respectively; as a hedger or member, they would be $4,251 and $4,251. For silver futures, your initial and maintenance margins as a speculator would be $6,750 and $5,000, respectively; as a hedger or member, they would be $5,000 and $5,000. For copper futures, your initial and maintenance margins as a speculator would be $6,750 and $5,000, respectively; as a hedger or member, they would be $5,000 and $5,000.