Whatever - it coincides with the roll, anyways. It'll be time for Jan. contracts by then. From IB site: "Exposure Fees only apply to a small minority of IB customer accounts with unusually risky positions. Most IB accounts are not subject to the fees." I have never received the fee.
If you think the product is unduly risky in the event of a nuclear bomb in Saudi Arabia over the weekend, you simply don't offer it. Or you increase margin on it. Charging a $.59 fee to accomplish that goal is idiotic. If you really think these products are risky and that IB realizes and is concerned about a nuclear bomb in Saudi Arabia over the weekend, and you think that IB's response to that clear and present danger OF A NUCLEAR FREAKING BOMB was to impose a $.59 fee on those products.....you should really be concerned about IB's basic intelligence and certainly their ability to manage risk!
Brokers cover tail risk by charging fees and building reserves. When the CHF spiked. IB took a loss for millions which it covered out of its cash reserves. Exact loss would be how much they could not recover from clients who went negative. IB could increase commissions/fees on all the clients by $0.01 (or whatever) to cover these events or $0.59 dollars (or whatever) on just the most risky of its clients, ie. the ones that are most likely to be hit by these events because they are in the market over the longest periods.
I'm confused. Just a few minutes ago you said they charged a $.59 fee to dissuade risky traders. Now you're saying something entirely different, that they are building excess reserves with it. Do we have any evidence that Interactive Brokers is doing anything other than meeting their reserve obligation under Rule 15c3-3 like every other broker not charging these fees? Any indication that they have increased their excess reserves in conjunction with starting to charge these fees? Any indication that $.59 on a few thousand contracts covers the tail risk of what again, just to remind you of what this discussion is about, of a nuclear bomb! Or maybe it's just going to the demigod's bottom line. Which again isn't a problem at all, just don't piss on people and tell them it's raining. We all fully understand what tail risk is, we understand what risk management is. If you think that's what this fee is about, it's clear that you do not understand what those things are. Just because the emperor says he's wearing clothes doesn't mean he is. Just because IB says that a $.59 fee is their benevolent sacrifice to make you safer doesn't mean that in any rational world it actually is.
The reality is that as long as they disclose these fees, higher that exchange futures margin, ever changing risk/margin requirements etc, they should be able to run their business as they see fit. You then get the defining vote; stay or go. Bob
You are right. IB's policy is ridiculous. How much money do you have in your account? Maybe ib sends messages to those who are close to the margin call.
Not on crude oil, but IB started charging me a Daily Exposure Fee since late October. I wrote about this in my journal, in the entry which I posted on November 1st. https://www.elitetrader.com/et/threads/trading-as-a-hobby.305910/page-5 I simply consider this an extra cost of "doing business", i.e. trading my system.
I got an Exposure Fee notice also on High Margin account. They are going to implement the fee starting Dec. 26. Is anybody affected by this crap? It's not a big amount but it's just so annoying that IB constantly nickles & dimes all the time but at the same does NOTHING beneficial for both IB or the trader. You can NEVER just concentrate on making money with them. They ALWAYS have to take something away from you. To me it's really a fraudulent way to get a bigger slice of our profit from us traders on top of the commissions that they charge us all in the name of "risk management" when they arbitrarily calculate a "worse case scenario" loss number and decide to charge you an X amount everyday based on that arbitrary figure and they don't even take hedging into account. So how is that protecting themselves and us traders? And what if this "worse case scenario" does not happen, do we get our exposure fee refunded? If they REALLY wanted to manage risk, they should've imposed higher margin so ppl can't trade in risky products at all unhedged. IB appears to be a discount broker, but when you add the little cost here and little charge there that they charge you, their commission fee is not that cheap especially when you take into account how crappy their software is. I am changing brokers starting in 2018. This exposure fee is just ridiculous!!