Hi guys, Last 4 days I experienced almost 50% margin increase at IB and I couldn't talk to IB about the reason, they just don't answer my help chat. Is there anyone in the same situation as me who is experiencing margin increase without a reason?
Call IB then press option 1 then option 4 for the margin department. They are very knowledgeable and will be able to tell you what has happened.
I contacted them and they told me that volatility increase impacts margin even if it is hedged trade.
Same here with a PMA. At every big increase of volatility like on the 17th of May, the total "available for trading" shrinks. I agree that even hedged trades will not change anything. This specific day, I had (successful) SXP put options, and that didn't change the margin increase.
Calendars mean non-linear pay-offs as the underlying change, and that's *before* accounting for non-linearities in time OR in vol. As well, at every expiration, and whether SEC or CFTC, your portfolio risk becomes a wholly different shuffle, as the dead options are washed out. We have another drop in vol today, with the VXST dropping ~8% against the 4% drop of the VIX. Depending on when you wrote your short and long positions, this could easily result in an increase in portfolio risk relative to when the positions were initiated, even though overall market risk measures have declined. I used to happily write calendars on equities, but haven't seen anything inviting to write in SPX-land for years. Best wishes....