IB and value of open stock orders

Discussion in 'Retail Brokers' started by vetten, Dec 19, 2009.

  1. vetten


    hello guys,

    Am in contact with IB about the value of open stock orders somebody can have in the account and that is not clear yet.
    IB monitors in real time and will cancel open limit orders when the account get more and more fully invested.

    In Margin Requirements, click on Calculations it says that everytime when opening a new order there is a check on leverage cap for establishing new positions called Time of Trade Position Leverage Check.

    The formula for me as I am not trading options is: Securities Gross Position Value (GPV) <= 30x Net Liquidation Value (NLV)

    ie gross value stocks (GPV) 50k, cash 5k, NLV 55k, current available funds 16k, leverage 0.90 but can go up to 1.20

    so according to IB`s formula I can open new orders to the tune of 50k (GPV) <= 30x 55k (NLV) = 1.6 million.

    seems very odd and risky to open 1.6 mil of new orders with 5k cash.

    My experience is that even with 10k in cash, IB starts to cancel open limit orders when I have more than say 200k in open orders.

    IB also checks overall position leverage and is called Real-Time Gross Position Leverage Check.

    If trading stocks only the formula is GPV <= 50x NLV

    seems a very unlikely formula again or am I missing something?:confused:

    could anybody shed some light on this issue?