IB buying power

Discussion in 'Retail Brokers' started by Bob111, May 14, 2009.

  1. Bob111


    Hi all! i'm having trouble to understand IB's buying power calculation method..
    example: 53K account, 33K cash,20K-bonds. buying power=111K.
    bought and short some stocks today, roughly equal for both sides.. total portfolio amount was about 40K-45K and at that time my buying power went almost to zero..
    looks to me that they only allow me to borrow against my cash and not typical 4:1, but 1:2. that is-if you have 30K cash-then you can have 15K additional funds for intraday from IB. ridiculously low, but i can understand that.. but what about 111K buying power?
    how did they come up with those numbers? can anyone explain this to me?

    Thank you!
  2. jgold310


  3. Bob111


    i don't what to say man....today it's works just fine..right now i have 46K worth of stocks(both short and long) and still have about 45K in buying power.
    but yesterday-it's just total disaster. i still have no idea,how they value my account yesterday and why all of sudden all buying power just gone. cost me some money,since i left on side open.. and of course market didn't go my way..it is not a first time btw..i told Dav from IB long time ago that their risk model is f**d..next time i will post a screenshoot to prove this.
  4. heech


    If I recall correctly, buying power is 4x your previous night's excess equity.

    Is it possible that when you said you had $33k cash, some of that was from positions liquidated that morning...?
  5. Bob111


    yes it's x4 on IB's on link above.

    no. i'm not holding anything overnight on this account,except for those bonds. not closing anything at the open either.
  6. heech


    Were any of the positions in stocks that require higher margin ratio (or non-marginable at all)..?

    See IB's list of special margin requirements:

    http://www.interactivebrokers.com/e...cntry=usa&tag=United States&ib_entity=llc&ln=
  7. Bob111


    could be...but..is it possible to get both long and short only non marginable stocks? all at same time? on other hand this list is pretty pretty long...

    Thank you info heech!
  9. Bob111


    here is another problem with IB i'm having for months(on top of incorrect sizes,slow charts and buggy TWS)-
    take a look at screenshot. total value of account is 47K. 44K are corp bonds, most of them AA-A1 rated. all investment grade.
    any one see a problem? i talk with IB CS few times-they didn't see any..but i do..
    why my buying power only 6.8K? if maintenance margin requirements are 35% on those bonds? because some how IB applied INITIAL MARGIN RATE to old,existing positions in those bonds. mean that you can;t borrow any money against them. so-you can borrow 50% on stock, but zero on investment grade bonds,where they saying on their own website that 35% rate should be applied..

    where is the end of this? i'm going to try to explain this to them once again tomorrow, but i think it is the time for some serious investigation..i'm not sure,if they doing it for a purpose or by mistake,but because of their "way" to value my existing bonds positions i have to maintain huge amount of cash(on which IB not paying any interest,while using them) for my daytrading..not good folks ..not good..
  10. It looks to me like the securities have a maintenace margin associated with them of $20,671. For some reason the excess liquidity is not released into buying power. It's possible those specific bonds are not marginable. That's what I would check.

    I don't trade bonds. I don't margin bonds. But I doubt if every bond has the same margin. Some bonds are significantly more liquid than others. I'm just throwing this out there as possibilities. I obviously don't know the answer.

    If I wanted the buying power and the bonds were a problem, I'd liquidate the bonds.

    By the way, I doubt IB is "doing this on purpose". They don't have it in for you. And it's true, no interest on cash....you're in a period of 0 fed funds rate eh? What did you expect? I'd like to be getting interest, but where do you propose to get it?

    #10     Jun 26, 2009