K.C. lowers minimum margins for wheat contract

by Jay Sjerven
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KANSAS CITY – The Kansas City Board of Trade lowered its minimum margins for its hard red winter wheat futures contract. The margin on hedge transactions was lowered to $1,500 per 5,000-bu contract from $2,000 effective Sept. 29. The reduction was announced in consideration of diminished volatility seen in the contract in recent months.

The margin on hedge transactions had held at $2,000 since November 2008, when it was lowered from $2,500, a level set in August 2008.

The new $1,500 margin level applied to omnibus account and member-for-own-account transactions as well as hedge transactions. The only exception was initial speculative transactions, where the margin was reduced to $1,875 a contract from $2,500.

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