Let me tell you. ..they dont call they just sell your position at market order...not a good broker for futures trading
To better understand point 1 and 2 (the ones that have to do with avoiding) you can just read on the IB website: Soft Edge Margining We will automatically liquidate when an account falls below the minimum margin requirement. However, to allow a customer the ability to manage risk prior to a liquidation, we calculate Soft Edge Margin (SEM) during the trading day. From the start of the trading day until 15 minutes before the close of the trading day, Soft Edge Margin allows for an account's margin deficit to be within a specified percentage of the account's Net Liquidation Value, currently 10%. When SEM ends, the full maintenance requirement must be met. When SEM is not applicable, the account must meet 100% of maintenance margin. Soft Edge Margin start time of a contract is the latest of: the market open, the latest open time if listed on multiple exchanges; or the start of liquidation hours, which are based on trading currency, asset category, exchange and product. Soft Edge Margin end time of a contract is the earliest of: 15 minutes before market close, the earliest close time if listed on multiple exchanges; or 15 minutes before the end of liquidation hours; or the start of Reg T enforcement time. If an account falls below the minimum maintenance margin, it will not be automatically liquidated until it falls below the Soft Edge Margin. This allows a customer's account to be in margin violation for a short period of time. Soft Edge Margin is not displayed in Trader Workstation. Once the account falls below SEM however, it is then required to meet full maintenance margin. Please note that we reserve the right to restrict soft edge access on any given day, and may eliminate SEM completely in times of heightened volatility.
Margin re-evaluation time for IB seems to be 15:30 (3.30pm) ET. The margin call is the flashing warning message you'd see 10 minute before liquidation.
Interesting. The above text is from IB's European website. The US/Canada/Hong Kong rules seem rather different: https://www.interactivebrokers.com/en/index.php?f=24176 I usually pay attention to the so-called SMA value. As long as that is positive will no auto-liquidation occur. This SMA value is visible in TWS and can be obtained via the API as well.
If you were running a futures firm and someone had a trade out that was running deeper in the negatives by the day would you wait? I'm sure for professionals they will call, but for Joe Trader the guy is probably too stupid/broke to pay them off anyway. Makes complete sense to liquidate immediately.
Nobody waits for days....pretty much everyone but IB gives you at least a few minutes to wire money over. No broker goes bankrupt based on the actions of a Joe Trader or a few Joe Traders, allegedly the reason why it "protects customers" to do autoliquidation. But at the end of the day I don't think people are really against autoliquidation for legitimate margin calls. Its that "the algorithm" autoliquidates positions like vertical spreads for european options assuming that they have less value than the minimum possible value for that spread.
Please tell us how to set up flashing warning message. what factors make it 10minutes? if SEM is breached (when net liq or EWL is 10% lower than maintenance margin?) then isnt it immediate? or only after 345pm?
Thanks for post qwerty11 I was liquidated twice today, even though my Excess liquidity was +ve, but below 10% of maintenance margin, it was almost exactly 345pm ET. is my new understanding of SEM correct, excess liquidity must be above 10% of maintenance margin otherwise you will be liquidated any time? So excess liquidity can be positive BUT if below 10% of maintenance margin, you’re at risk of being liquidated, esp after 1545? I was of the understanding that excess Liquidity has to remain positive so no auto liquidation, and only if it is -ve after ~1530 you have to make it positive otherwise will be autoliquidated. Thought it was true that if before 1530 the SEM allows you to be up to 10% -ve of the maintenance margin? Which understanding is correct? I got this window after being liquidated. Does it mean EWL has to be 10% above current maintenance margin to be safe (same as excess liquidity having to be min +ve 10% of maintenance margin)?
Margin phone calls are not typical in this era - IB has a margin call alert pop up & notifications that can be sent via email & SMS text. I had a margin call back in 98 with another broker, I learned to size down so to as not ever go there again & I never have. Here is what you are looking for - see the bottom of the page: https://www.interactivebrokers.com/en/?f=/en/general/education/pdfnotes/WN-UnderstandingIBMargin.php?ib_entity=in
They don't published "the algorithm" nor are the mere mortals that work "customer service" there provided access to any information about what goes on inside of it. They will literally tell you "the algorithm" decided to autoliquidate and that they can't tell you any more. It also autoliquidates in some cases when you have plenty of margin, specifically it can't properly computer max possible loss in a vertical options spread. I don't recommend trying to figure out what it's doing because it's not at all consistent in it's behavior; continuing on that way lies madness. Pretty much any broker is better than them, just switch.