I want to sell a call, naked, on ES June 10 @ 5000, fpr $0.05, and my margin at Schwab is half ($1,203) of IB ($2,453). Schwab? Friggin' Schwab? (The trade is hypothetical, just for margin determination; I'm not selling nickels.)
So, whats the question? Schwab has half the margin of IB as per your post. Why is that a problem for you?
IB don't know what they are doing (eg. the negative oil price losses 2 years ago), so they just keep margin as high as they can get away with, blunt tool but easiest way to reduce the risk for themselves.
Easiest way to weed out small accounts of people who are only free bee hunting and put on lottery tickets that brokers really hate. Good for the rest of us, lower risk of broker blowup and focus on other areas such as making new exchanges accessible and becoming more competitive regarding commission.
Nice trade. IB is funny that way. When the STEAMROLLER comes, they want YOU to get flattened , not them Good luck!
Except when the negative oil price stream-roller came along they reduced margin to near $0. You could buy as much as you wanted when the price was $1, because the IB risk algo thought prices could not go negative, so let traders load up. IB lost over $100 million
Yeah, they fukked up . You try managing 100,000 symbols worldwide. Good luck Mr P is worth many billions, so I assume those mistakes are few and far between Thanks for asking !
That mistake happened within one year of him retiring from the CEO position. IB is not the firm it used to be.