IBs reply: Dear Mr. Kakad, Unfortunately the Portfolio Margin parameters are received and processed from the OCC each night then applied to all accounts after midnight EST. These IB nightly system refreshes will update the real time margin requirement for all accounts. Any deficit resulting from the overnight IB system update is a real margin deficit. The Liquidation system can close any position that is actively trading to reduce and close any margin deficit. When an account holds US Stocks and US Stock options then the Liquidation system will usually, but it is not guaranteed, to wait until 09:40 EST to enter Liquidation trades. If your account has a large deficit that may require more than 10 minutes to adjust after the 09:30 EST opening you can call the Trade Group. We can have the Risk Manager review your account. It may be possible to allow 10 or 20 additional minutes after 09:40 EST to close the margin deficit. The Trade Group can be reached at 877-442-2757 Option 1 and option 2 from 08:00 to 20:00 EST. The manner that the nightly OCC updates are applied does not change. It is best to always review your account early in the new trading day so there is time to call the Trade Group if necessary. Sincerely, Jim Trade Group
Would you answer my previous question? Has the margin increased to more than your maximum loss on the iron condor? Should not be more then that.
Sorry I had not read your question. How do i determine maximum loss? I have taken mid price to close iron condor. That loss will be 173000. That is more than the margin. But yesterday I had not done any trade and my margin requirement was as stated before. How could it increase by 26% when markets were closed. Your comment appreciated
If you sold a 5 point iron condor in the SPX your maximum loss would be $500 (less what you sold it for). So if you sold the 1725/1730 put and 1800/1805 call condor for .30, your maximum loss would be $470 for every condor you sold. (This particular condor was the one that traded the most this week) Since a portfolio margin account is essentially a risk based account that looks up and down a certain percentage on the underlying index, I would not think the margin would be more than your expected loss. I was trying to determine if the margin was miscalculated when you put the spread on originally or overnight. Either way I would not think that the margin should be more than your total possible loss and perhaps they are calculating incorrectly. If someone else understands PM margin requirements differently, please chime in.
My margin went up a lot during the night between Thurs/Fri as well. This is probably due to the 200 naked puts I had on SPY. If each one just had an increase of $100 margin requirement, due to the SPY going down a lot on Thursday, that would be a $20k increase in margin overnight. I keep track of my margin used at the close each day and the next morning, and am pretty sure my big increase was due to my naked puts.
My margin requirements have been reduced back to level on Thursday. I suspect either OCC had made some errors or IB had made some errors. And these errors have been corrected. I have not done any trades in between. I am happy things have been restored back to Thursday level.
that is why I left most of trading from IB. IB does not allow intra-day margin future trading in my Roth IRA. that hurts lot, since my leverage dropped too much! Even in normal situations like regular margin account,future margin reqirement is too high! so I changed into option trading.but the damn thing about IB is on friday expiration day, that is the best day to day trade options, IB put margin reqgirements on me, I am just buying put/call, there is no sense for margin, that hurts me lot, since I can not trade ITM, I only can trade OTM, what worse is after 2:30pm, they will not let me have options entry even they know I am not interested in assignement! that is why I move out of IB most of my accounts to other firms. just leave it for cross-trading platform market monitoring. raise margin is like old time bucket shop to set up suckers.