Effective Monday, stocks with market cap under $100M will be non-marginable at IB

That doesn't leave too many to trade then does it?

 

In a Bulletin IB sent to its customers. Change will be effected Close of Business today (9/30/08). Will affect Interest Rate Futures ZB, ZN, ZF, and ZT and their option products.

FYI:
To receive advance notification of Performance Bond (margin) changes through our free automated mailing list, please click here to access the CME ListServer Subscription System and subscribe to the Performance Bond Rates Advisory Notices listserver

Jack

 

EXACTLY. It's nothing new that the government screws things up, that's what they always do. But IB should know better. They have been in this business for decades, it should be nothing new to them that market volatility sometimes gets extreme. That they suddenly realize small caps to be dangerous doesn't paint a very good picture of their market knowledge.

At the very least they should apply these changes only to new positions, not existing ones. By making these sudden changes they only worsen market volatility, and possibly cause unnecessary losses to some of their customers. These margin changes are just as stupid as the sudden short sell ban by the SEC, just on a smaller scale.

And of course they have the right to change margin rules at any time. It does NOT mean they have to do that in the most stupid manner possible. Or does this move indicate IB is panicking because it is having some serious trouble???

By the way, has IB EVER taken material losses, or ANY losses, due to a customer blowing up? They should disclose if they have, when and how much.

 

thank you for some sensible words.
this site is full of crap 99% of time.

 

" That they suddenly realize small caps to be dangerous doesn't paint a very good picture of their market knowledge."

their earnings record speaks for itself.

"serious trouble"
their on time systems sell out clients before their equity in the accounts drop below zero.

"panicking"

by applying the new rule to co's with less than 100M shows a reasoned approach to a volatile situation.

"ANY losses"

you are the one who is panicking. the firm has excellent risk management as can be attested by all the ET posters grumbling about being sold out without being offered a chance to deliver more monies.

 

Thanks Jack;

I will point out that whatever the modification, up or down, it is IB specific. As of this posting, performance bond requirements for the products listed were last revised 9/24/08, per the CMEGroup website. I see no notice of upcoming or pending changes for these products at CMEGroup.

Osorico

 

http://www.cme.com/clearing/rmspan/pbadv/Chadv08251.html

 

There a good reason Peterfey is still around and well after 30+ years.

moo won't last 5 seconds.

 

Haha, that's all you can argue?

IB postponed implementation by one full day. Hey, at least something!