A small price move can be a large result on the cash posted

riskPublished 20 October 20261 min readmulti asset

Key points

• Notional divided by equity is the exposure multiple in the illustration.
• A 2 percent adverse move on a notional five times the equity is about a 10 percent result on that equity, before costs.
• A generic buffer is not the price at which a firm will close the account.

What is going on

Account equity of 10,000 and a notional of 50,000 is a fivefold exposure. An adverse 2 percent move on that notional is 1,000, which is 10 percent of the starting equity before costs. A favourable move scales the same way. A short position flips the sign of the price move. Added costs reduce the ending equity. Collateral required at the start and the level at which a shortfall appears are percentages you type. They are not read from a broker schedule.

Why it matters

The cash demand can arrive before the reason you held the position has been resolved. Daily settlement on a listed contract, a higher house requirement, and a gap are different mechanisms that can all demand cash. The futures calculator on this site uses a contract size you enter. This note does not reprint a venue’s current requirement.

What to watch

Write the equity, the notional, the direction, the move you are testing, and the costs. Read the firm’s own close-out rule before treating a modelled buffer as a distance you can rely on.

Risks

Losses can exceed the cash posted when the move is larger than the illustration, when several positions move together, or when the exit price is worse than the mark. This page does not say a product is suitable.