IB Crude Oil Margin Reqs

Discussion in 'Retail Brokers' started by Zanatos, Oct 31, 2007.

  1. Zanatos


    Today IB raised the crude oil margin (CLZ), to the amount of $6,400 (it was approx $2200 back in August, a 290% increase)...Nymex raised its margin reqs during this time a mere 17.5%.

    IB already raised its margin rates from $4050 to $4700, in line with the notice of margin reqs increase from the Nymex, now apparently they have decided to raise it to the non-member rate of $6400. IB's answer, is of course market volatilit, but that doesn't make sense...why raise it from member rate to non-member rate?

    My patience with IB is wearing thin....if any reps are here....does IB plan on bringing back the daytrading rate at least?...if not, maybe someone can give another futures broker that has better (or at least more STABLE margin reqs)?
  2. How about reducing the number of contracts you trade and increasing the profit target (ticks) per trade.

    That way this increase in the margin wont effect your P and L.
  3. With 3 point moves in less than 10 minutes I can't say I blame them. If you're that close to your margin you're one IB outage away from wiping out your account (and it's not like there haven't been IB outages lately!).
  4. A good trader shouldn't depend on these small margin req. hikes.

    I mean, if you hardly depend on that,you're doing something wrong.
  5. Daal


    but you are forced to change your system, if you backtested it and it works changing because of some IB policies is insane
  6. Zanatos


    Firstly, it doesn't matter how many contracts or portfolio leverage that one trades, the margin req. increase is going to effect your contract size (hence your trading system) just the same. Personally, my maximum limit that I will go is 50% of my portfolio into a single trade, on 1 exchange. Which gives me the ability, say if the Nymex crude goes down, then I can immediately hedge it on the IPE (as actually the IPE went down for 1 hour today). But this is all really beside the point....the only point of regard in this thread is that IB has raised their oil margin reqs 200% since August....and that IS a concern, which needs to be addressed. As no matter how you look at it...you aren't getting the same bang for your buck...and strategies will be non-optimized.
  7. Zanatos


    Again chauncey1...its has nothing to do with being a "good" trader or not, or being "overleveraged"...these are non-sensical points...and IB increasing the margin req. to 3times the August rate, is not a small margin increase....the Nymex margin increase of 17.5% is small.

    Personally, I have been very satsified with IB as a broker...and in terms of everything/the range that they can do/offer, no other broker even comes close to them...simply, if they keep messing widly with the margin reqs for oil...I will find another broker to trade oil with.
  8. ids

    ids Interactive Brokers

    Please, stop this nonsense. We take margin requirements right from the exchange. We stripped intraday special margins a few months ago. That is it. Right now, maintenance margin for NYMEX CL is $4000. Initial is $5400.
  9. Sorry if i've been rude.

    What i mean is that in any trading system a huge change on implied volatily with margin requirement should be taken in consideration as on this wild markets anything can happen.

    I mean, if you take the 4k margin requirement as usual you're one wild move away (like the one we had, and it could get worst, who knows anyway) of having to change anything because of the change in volatility.

    I understand that IB looks like an scary girl compared to other brokers in terms of margin req. but if anything huge happens (like an strike on middle-east or something) then i don't want to wonder what its going to happen with these broker offering kicking-ass margin req (i.e $500 on es). So, the high margin req. turns in a huge favor to trader instead of a pain in the ass like it looks right now.

    Regards ,

  10. Zanatos


    Firstly...the backmonth of oil is $5,400, that is true...HOWEVER, the current contract month is $6,416 currently, that is a fact. This is inline with the Nymex rate for non-members (if you read the initial first post). You should also know that yesterday the margin rate was $4750 (the clearing member rate), and today it is $6400, non-member rate. So the question is...why the shift in rates? Or let me rephrase...it seemed as if IB was giving us the clearing rate...and now we are getting the customer rate...which was explained because of market volatility.


    NYMEX to Change Margins for Crude Oil, Related Futures Contracts

    NEW YORK, N.Y., October 29, 2007 -- The New York Mercantile Exchange, Inc. today announced margin changes for its crude oil and related futures contracts, beginning at the close of business tomorrow.

    Margins for the December 2007 crude oil, crude oil calendar swap, and crude oil financial futures contracts will increase to $4,750 from $3,500 for clearing members, to $5,225 from $3,850 for members, and to $6,413 from $4,725 for customers. Margins for all other months will increase to $4,000 from $3,500 for clearing members, to $4,400 from $3,850 for members, and to $5,400 from $4,725 for customers "
    #10     Oct 31, 2007