IB Margin Increase

Discussion in 'Interactive Brokers' started by Eldredge, Oct 10, 2002.

  1. Eldredge


    I agree with you. My complaint is in the lack of warning. I think that is inexcusable! They could have at least sent an e-mail or bulletin. I guess I will either have to trade futures or start looking at prop firms because I really use the margin for the way I trade pairs.
    #21     Oct 11, 2002
  2. Eldredge


    Sorry, this is an edit error and I can't delete it.
    #22     Oct 11, 2002
  3. mskl


    When you say your margin will drop to 2:1 at 3:50 - do you mean your intial or maintenance or both??

    It sounds like it may be your maintenance and that doesn't make much sense as IB's basic margin requirements for non day traders is always 50% intial and 30% maintenance.

    Why would day traders require 50% maintenance??
    #23     Oct 11, 2002
  4. Eldredge


    I don't pretend to understand their margin, but I guess a daytrader has to fall within the 2/1 margin between 3:50 and 4:00. Apparently, the extra margin will only be available from 7:33 to 3:50 - or something like that :confused: .
    #24     Oct 11, 2002
  5. alanm


    Does anyone have an official answer as to what the rules are?

    It says that 50% applies in the 10 minute span from 15:50 to 16:00, and 25% the rest of the time (i.e. the other 23+ hours). That's not the way it seems to be working though.
    #25     Oct 12, 2002
  6. wb5983


    They take a "snapshot" of the balances between 350 and 400PM and if at that second your over the intial you get liquidated. Example: If you were over at 352 and under at 354 and they "checked" you at 356 you would be fine, if checked at 353 you would be liquidated
    #26     Oct 12, 2002
  7. That's like asking why would day traders require $25000 unless they have paid fees to become "professionals". Or why would arbitrage be illegal if the DJIA rises 160 points or drops 160 points? Or why do you have to use options to short on a downtick? Or why would an exchange be forced to hide its quotes as soon as it becomes too efficient and too liquid?

    It's like most everything else in the world: A combination of fear, greed, and an amount of blatant intellectual inadequacy that can amaze you anew every day.

    I know of only two ways to be "better" than the baboons responsible for laws like those: 1. beat them at their game by making more money; 2. lead a more ethical life than they do.

    If you do neither, i.e. lie, cheat, or steal to "get ahead" but are still stuck having to work all your life, the crooks who squeeze a few million bucks out of the system in an immoral way are simply better than you in every way that matters.

    #27     Oct 12, 2002
  8. ed_md


    For months, the IB system has allowed 25% overnight, then Friday from the beginning of the day a new higher ovenight initial margin requirement was apparent on my account page. I called IB to ask what was going on - maybe there was an error in computing the margin requirement (it was even less than 2:1)? The first IB employee I talked with could not explain what had happened, but said a "margin specialist" would call me back. More than an hour later, no call, so I dialed up IB again, told a second employee about the earlier call and that I really needed to talk with someone who understood what was going on. He also said that a "margin specialist" would call me back, but was a bit vague about "when", so I told him that I needed to know within 10 or 20 minutes. I was getting angry and said that a senior person must call me back SOON, as I have other accounts I could move money from to IB if necessary, but that it takes a few hours. I was also thinking of closing some positions at IB and duplicating them elsewhere. NO CALL BACK was received (not even 2 hours 30 minutes later)! Luckily, I undid some positions and used other brokerage accounts instead, because at 3:50 the high overnight initial margin requirement became the maintenance margin requirement for 10 minutes. If I had not acted, some positions would have been liquidated. This is CRAZY - IB changes the way the system works, and when I identify that something is different, they do not respond to questions about what is going on. After 4:00 I called and asked what was IB doing? The employee implied nothing was different, and stated that no margin information was ever discussed on the phone. Also, there are no "margin specialists" (uh, so what about the 2 calls I had made earlier in the day, at which time employees told me my questions would be answered by a "specialist" calling back?). I asked to talk with a more senior person and someone called back in 15 or 20 minutes. He just went over the margin requirements but did not indicate that there had been any change. Over the past 2 months, I have had other annoying problems with IB, but Friday was the most unnerving yet. Now, I am afraid of IB as from this ET thread it appears margin changes were made for many accounts on Thursday, yet Friday the employees I talked with were still not really clear about what was going on. Is IB trying to gloss over that they previously allowed 4:1 all of the time? While I will probably maintain an account at IB for cheap futures trades, I am now looking to do more stock trading elsewhere... Does Cybertrader do bizarre things like this?
    #28     Oct 13, 2002
  9. Someone at IB needs the have thier ass kicked. Apparently , like most businesses , when it hits the fan, the customer comes last.

    I noticed the change in Overnight margin, on Friday (or was it Thursday) , but tossed it up to a 'glitch'. First I'm learning about this 'change' is now, late Saturday night. I was lucky not to get sold out unexpectedly , as I many times hold over the 2-1. Just happened to get flat Friday.

    I don't like my money f****ed with. IB has been good to us in many ways, but changing the way they do business without notice because some regulator said boo, is not the way to go.

    #29     Oct 13, 2002
  10. In the past you could buy some penny stock and have it be completely marginable, even though it was only trading at 8c a share. Now I see the words marginable securities. Does this mean that not all stocks can be margined against? What are the new rules that determine what stocks are marginable?
    #30     Oct 13, 2002