MARGIN INCREASE TO BE IMPLEMENTED
In the interest of ensuring the continued safety of IB clients, IB is modifying certain margin policies to adjust for the unprecedented volatility in financial markets. The changes will promote reduction of leverage in client portfolios and help ensure that clientsâ accounts are appropriately capitalized.
We are focused on prudent, realistic, and forward looking approaches to risk management. In order to provide the broadest notification to our clients, we will be posting regular announcements to the IB System Status page, http://www.interactivebrokers.com/en/software/systemStatus.php. We strongly encourage all clients to monitor this web page for advance alerts regarding margin policy changes.
In the interest of ensuring the continued safety of IB clients, IB is modifying certain margin policies to adjust for the unprecedented volatility in financial markets. Please monitor this web page for alerts and updates regarding margin policy changes.
Stock margin increase (7-8 October 2008)
The minimum margin requirement for stocks held in regular (non-Portfolio Margin) accounts will increase from 25% to 30%. This will affect all stocks offered by IB globally: US, Canada, Mexico, Germany, UK, Switzerland, Sweden, Spain, France, Netherlands, Belgium, Hong Kong, Australia. The changes are expected as follows:
* US and Canadian stocks: increases will commence 14:00 EST, Tuesday, 7 October 2008.
* European and Asian stocks: increases will commence Wednesday, 8 October 2008
Stocks whose margin already exceeds 30% will not be affected.
Currency margin increase (7 October 2008)
The minimum margin requirement for currency positions will increase from 2% to 2.5%. This will have greatest affect on cash/spot foreign currency positions in USD, EUR, AUD, GBP, CAD, CHF. It will also affect portfolios with other asset classes denominated in these currencies as well. For example, if your base currency is USD, and you hold 100'000 EUR worth of EUR denominated stock, the margin requirement relating to the currency component of the portfolio will increase from 2000 EUR to 2500 EUR in addition to any margin requirement for the stock risk itself. This change is expected to go into effect at 16:30 EST on Tuesday, 7 October 2008.
OK IB bashers - go to it!
If this doesn't signal a bottom I don't know what does. (other than our good old CRAMER of course calling everyone to sell).