I am with IB HK. For each future contract there is a margin requirement. Questions: Is this margin requirement need to be in cash or is it just an increase in the account initial/maintenance margin? For example if I have 100k ELV but 0 cash, will I be charged interest due to the margin requirement? I understand that if the position goes against me I will lose cash, but how about the initial margin? If the margin need to be in cash, how do I make sure I have enough cash, so that I don't need to pay interest to IB? Is the available cash reduced when I open the position?
No, the margin requirement does not need to be present in cash in your account. IB looks at the total account value to see if your account is sufficiently funded for your total margin requirements. IB does charge debit interest for the margin requirement.
Make this trade on your IB paper account. Read all the click-through trade/margin effect screens. Pull up your account window. Re-read what HobbyTrading wrote, and what IB says about margin (and the definitions for each Account window field) until you are satisfied that you can convince a 12-year-old of what you just read. It's not hard, and any time you forget, you can redo this little operation and learn it even faster.
My main issue is this. Do I really need to comb through the statement and sum up the margin, and leave enough cash so that IB don't charge me interest?
Yes, that is what you need to do if you care about the debit interest. I don’t, because it’s so small compared to the fluctuations in profit/loss that I ignore it.
This sounds like a reflection of the use of a universal account. If you were to open a futures account at an FCM, not tied to an equity account, there is no need to charge interest as long as at end of day you cover your margin with your liquidating equity and the value of your liquidating equity exceeds any T-bills you might have funded with.
In IB universal account there is no need to charge interest as long as at end of day you cover your margin with your liquidating equity and the value of your liquidating equity exceeds any T-bills you might have funded with.
@Robert Morse you mentioned you can match IB's options commissions, does Lightspeed charge anything on options assignment/exercise?
Our option commissions are generally lower than IB. On Sterling, Trader Pro, Realtick and Silexx we offer both a SMART route and the ability to direct your orders. The SMART route avoids the Maker/Taker fees on all but cash-settled CBOE symbols and the directed orders can provide credits. This can save a lot of money on routing fees. As for commissions, our base rate is only $0.60/option and includes the OCC fee of $0.05. Lightspeed Trader is a DMA platform for equities but for options our clients use the SMART route. When LVX is out of Beta for our Wedbush clients, that will be a SMART route software only. The charge for options assignment/exercise is $15.