The last time the CME hiked margins across the entire crude oil space was one short week ago, on Tuesday to be specific, when the most important contract, the CL Crude Oil Future, saw its initial margin rise by a little over 4%, from $4070 to $4235.
However, as last week’s subsequent events clearly showed, the margin hike was nowhere near enough to bring some stability to the market, when the crude plunge accelerated toward the end of the week, leading to a near-record rout in the product.
Which perhaps is why moments ago the CME once again hiked both initial and maintenance margins across the board for some 151 pages worth of futures contracts, only this time the required cash for initial positions or to maintain existing spec bets for the front month contract was increased four times as much, from $4235 to $4895…
... which means the weekly increase in crude margins is now about 20%, which also means that those specs who were in margined, money-losing positions until today, will have to pony up substantially more cash, or else the crude dump will resume and rather quickly. Unless of course, the recently most margined positions happen to be new shorts, who would now rush to cover.