I don't trade many spreads but I've had some ZCK/ZCN bull spreads that I've wanted to hold onto. I recently learned that Interactive Brokers makes you close out the soon-to-expire contract TWO business days before first position day, which is 4/29, so I had to be out of the contracts by 1:15 CT today. Not a big deal, I'm out and they were very profitable but I would have liked to hang onto some of the spreads to see what happens in the next day or three. I'm almost positive that other brokers I've used would allow spec accounts to have a position in the nearby until the close of the trading session on 1st position or 1st notice day. Is my memory foggy or does IB have a stricter requirement than others?
You aren't foggy at all, and if you don't close it, they will do it for you in an awful manner( market orders ). Guess who might be on the other side ... My other broker just send me a late email the day before first notice day and gives me some time to close it. However, IB Policy is great if you run auto systems on multiple contracts ( hard to manage 100s of FNDs), your order simply won't be sent if you are too close to FND.
Thanks for the response. You make a good point about the risk management benefits of the policy not just for IB, but for large traders, too. I did fine with the trade, but it's gone from about a 20 cent inverse to a 35 cent inverse since the date of the OP. Would have been nice to catch some of that if I had two or three days more in the trade. Oh well, I know the finer points of the rules now and if there's a trade in the future that I want to take to the last possible minute, I might use my back-up broker.