According to IB customer service this rule is still in place as of now. In regards towhy all I got was 'market Volatility' They suggested I open a ticket for a more detailed response.
how does it skew the playing field? are you a compulsive gambler that maxes out margin on every trade?
To me IB's action shows how much they care about idividual trader. They could give people 24 notice if they cared. Given today's market action it was very last minute but pretty good call in the end...
yes your probably right, but if we really feel that strongly about it we can always find somewhere else....
rules should be created with volatile times in mind - not being changed during those times - like everybody seems to be doing nowadays (rating agencies, SEC, government etc.)
Im pretty sure youll find it states very clear in their account forms that they reserve the right to adjust margins at any time, including due to increased volatility........ And bogging them down in some strict margin rules would only make things worse anyway. "IB have gone bust due to an inability to cover their risk by increasing margins when they needed to due to new regulations....." Ive had my own fair share of problems with them but this definately isnt one of them.....
When buying stocks on margin IB must lend the remaining money from other brokers, banks... I assume they are no more eager to lend based on small caps.
Maybe it sucks to be on the wrong side of it, but you have to understand the broker's position. They are extending short term credit collateralized by the stock in your account. What else are they supposed to do when they get nervous about the quality of collateral? Risk taking a big hit because they want to be nice to individual traders and give lots of notice? If they are not pissing some people off they are probably taking too much risk. If lots of customers are moving their accounts rather than just bitching they probably aren't taking enough.
Actually just checked it on the tos screener and it listed 9663 stocks with a market cap of less than $100m
Couldn't you just get your series 7, take your 25K and join a professional firm? IB always looks so good on paper, then the minute a large market move happens they reel in the lines. Yes you could. If you want the quick an dirty on stocks with a market cap under that limit, i think yahoo has a filter for that. Otherwise, subsribe to worden brothers tcnet and filter it that way. It's not difficult to do when you are committed. Peace and good trading.