It will significantly affect how much I use IB for sure. I am fortunate enough to have another account to use but not one that is competitive with IB ratewise. That is why I am looking for an alternative.
Lightspeed is about the same as IB: http://lightspeed.com/?page_id=5061&from=5091 Also they're advertising 4.5 stars from Barrons for active traders
Should have mentioned I need portfolio margin. Am I wrong or is that something Lightspeed does not offer. Couldn't see anything about it on their website.
I was a little surprised they went as high as 250mil cap instead of say 100mil for this change because it makes probably 2/3rd's of listed US stocks non-marginable now at IB. And it's not like bigger caps are all that much safer lately I remember them making bank stocks non-shortable in 2008 but despite the wild swings we had I don't remember smallcaps losing margin back then. For the time being I'm putting more money into my acct (not getting any interest anyway in the bank) to compensate but I'm hoping this is not a longterm change. Anyone have any idea how long IB is likely to keep the 250mil cap threshold for marginable stocks?
That is what I was wondering also. Don't really see volatility decreasing significantly in the short term so it could be awhile. My guess is that they will lose a significant number of customers. I could certainly be one of them.
Penson has not made this change. Feel free to contact me for more information about portfolio margin accounts at Penson through Victor Securities. Bob rmorse@victorsecurities.com
I think this is a game changer. If they don't reverse the rule, I will be transferring my account to a prime broker. I have a material account with them and can't operate without margin. I'm not a day trader but focus on micro caps and hedge accordingly with ETFs. I'm not sure we will see big moves in stocks as a result of this, however. I could be wrong but I'd think this only effects a small minority of their customer base. It's a terrible business decision. They are assuming a $150 million market cap is inherently risky (or more risky) due to it's size. This is simply wrong. They might as well limit margin on all stocks with the letter "A" in the ticker. I truly believe that the people in risk management at IB and most large brokers have never managed money before and have no real idea what they are doing. For them, they'd rather save $50,000 on losses if it means costing them $20,000,000 in revenues. I don't have a name of a retail brokerage firm that is anywhere nearly as good as IB but if your account is large enough there are many small prime brokers that would take you. If you are not big enough you might be shit out of luck. The whole situation is awful. I just registered to post here.