CME Group (CME) reduced its margin requirements on Thursday by 25 percent for its natural gas futures, reported Dow Jones.?This comes as its daily price movements have tapered from earlier this year after the market had been volatile thanks to the unusually cold winter.
This became effective after Thursday’s close. The product trades on the New York Mercantile Exchange, which CME owns.?
The new requirement has?investors in one natural-gas contract required to deposit $3,300 to open a position and then maintain $3,000 of that to hold the position overnight. This is down from the previous initial margin of $4,400 and its $4,000 maintenance margin.?
According to Dow Jones, earlier this winter in January and February, front-month natural-gas prices moved 5% or more on 16 days and now in March, prices have not move 4% or greater in a single trading day.
On Thursday, April natural gas futures hit a session low at $4.382 per million British thermal units–it weakest point since January 21.