IB demo account margin doubt

Discussion in 'Options' started by wecash.singh, Dec 3, 2014.

  1. Hi,

    I have a demo paper IB account. I currently have 1 million to begin with. I dont understand the below statement:


    Quoting
    The total maximum margin position that can be held in each tradable security, regardless of the leverage used, the number of trades made for that security and the use of derivatives that reference to the same product, is limited to $ 400,000. In particular, this means that for instruments that give the possibility to use leverage, such as Forex or Futures, the limit applies on the initial margin requirement required to open the position, not the notional of the underlying security

    What does this mean. Does it mean, that the maximum amount that can be deployed to open a position is 400k or does it mean that ideally the maximum amount I can bet initially on a single trade is 1.4 million .