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A question about the futures market?
Recently, i've been intrigued by the futures market. As far as i have heard, just to open a futures account requires a substantial deposit and small capital (1k-5k) is insufficient to trade futures. Is this true? Also, what are the margin requirements like on index and stock (blue chip) futures and would brokers be willing to provide additional leverage if there was some hedging done on the positions? I'm an Australian resident, if that makes any difference
minimum deposit to open an account used to be $5000 at many brokerages. not sure about current situation. there are minimum margin requirements for each contract and spread position. your brokerage may require additional margin beyond the requirements of the exchange. stock index futures are large contracts and require more margin. besides the standard contracts there are electronically traded smaller contracts (e minis) that require about $5000 margin for stock index futures. other futures contracts may require less than $1000 margin. spreads on stock index futures also have low margins. check with the exchange that the contract trades on to determine minimum margin and also contact various brokerage firms as well. a hedged position does not have the risk that an unhedged position does and as a result would not require as much margin be sure to start off with enough margin to allow for some losses before you are out of the game.
Stocking Blue Catfish