back to futures options for me

Discussion in 'Options' started by deviltrader, Jun 19, 2007.

  1. IB is making changes to portfolio margin that will make it worse than Reg-T for certain positions. For me there's no point in PM anymore because the leverage is bad, so it's back to futures options. Sigh, it was a great 3-month ride with PM...
     
  2. What changes are they making, to what type of positions?
     
  3. I don't know the details but they said they are changing the parameters to reflect more extreme price movements. If you have fully hedged positions such as a conversion, I suspect your PM won't change. Otherwise it may balloon 5 to 15+ fold. What I don't know is if the change will decrease the volatility of PM (I hope it does).

    I'm having a hard time getting a detailed answer so if you can wring one out of them, please post here.

    Hopefully this is a false alarm like the change a month ago. That turned out to be not as significant as it appeared. In fact I wonder if they even implemented that change.

    Send them a webticket to ask with your new PM will be. Make sure you're sitting down, you might be in for a shock. I would be curious to know how your PM changed.
     
  4. ids

    ids Interactive Brokers

    This change will affect only a few accounts and we warned everybody who is involved.
     
  5. Care to tell us what the change is, or is it a secret?
     
  6. ids

    ids Interactive Brokers

    In simple terms we will increase margin if you have a portfolio with exponential risk growth besides the standard margin interval. We would like to defend us and our customers from the Black Swan kind of events. Once again, an overwhelming majority of PM accounts is not affected.
     
  7. I wasn't warned and I was affected. My margin jumped 25 fold. If I had not found out through someone else this change was coming, I would have been royally screwed. Because I knew the change was coming, I refrained from making trades.

    IB should have told everyone with PM not just those it "thinks" were involved.
     
  8. Well this is not a very useful thread since no one had laid out the mathematical mechanics of this new change. I see nothing different on their web page and the explanation ids gave was useless; it sounds like there is no point of PM at IB. I still can't understand why people on this site defend IB's customer service, I know they offer a lot of products and have low commissions, but their service is a joke. I have called 4 times and sent an email asking about PM and every single time I have been given completely incorrect information. The answers I received were actually laughable, one guy insisted over and over no matter what I said that if you have a concentrated portfolio you have to cover measurable less than standard PM margin. He couldn't even stop and think for a second that it makes no sense.
     
  9. Check your PM between last Fri morning and this morning, that's when the change happened. Stress points for index options appeared to go up substantially, to the point it's worse than Reg-T.

    Their website's description of PM is out of date. I think the offset values are wrong too, because they supposedly changed them a month ago but I didn't see the website changed.
     
  10. I show the SPX atm short straddle roughly equivalent under PM and Reg T. :eek:
     
    #10     Jun 25, 2007