Tuesday, May 02, 2006

Caution on Margins

A news report just came out suggesting that the current boom in commodities might be getting too warm.

The report shows that the London Metals Exchange is raising it's margin rates for different metals. Copper is going up from $6,700 to $14,575. Aluminium & Zinc mnargins have doubled also.

This means that the exchange is worried that investors don't have enough cash backing for the postions that have.

It would pay to make sure your margin to equity ratio is not getting out of hand.

Murray

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