This was always my problem with IB in past panics. I never minded that much that they used to remove intra day margin. But the problem was they were always slow to bring it back, even after volatility had gone back down for a long time.
I think you misunderstood my post to mean that I am trading VIX products (I am not). Otherwise what you said makes no sense to me. I am talking about VIX as a proxy for overall volatility. If margins are linked to volatility, then they should be falling together with VIX. The fact that the opposite is happening for several weeks means IB's system uses a very lagging indicator of volatility, or it's a completely arbitrary decision on their part. Either way I am not impressed with this kind of risk management.
For futures, i dont think intraday should go above exchange overnight. Overnight margin is the amount the exchanges require for holding over the weekend, when markets are completely shut and could gap massively after the weekend. IB demanded 3x CME overnight margin for intraday trades
The fact that future expected volatility is so volatile would be a good reason to keep margins high. I thought the whole point to trade with IB was that you put up with their shitty customer service in exhange for a robust risk management system that prevents them from going under (and taking your hard earned dollars with it).
What numbers? That they have plenty of customers? How is it related? That's like someone talking about gearbox problems on a Ford and you replying with "but look how many cars they sell".
Yup. But is correlation risk for IB. They have 100mm in equity and 5bn in customer deposits (for example). If everyone borrows the max under regt then IB has to borrow 5bn from some counterparty. If 2percent of the customers blow up, then IB is finished. Further, If the repo lines/LOC get pulled then IB may not be able to fund all the customers who want margin. So they should make it more painful to borrow funds. This is the systemic risk in the system right now.
Of course, you can build your own risk management system and go to a broker who values customer service more: The kind of broker who gives you a nice friendly phone call asking you to clean up your margin call by 3pm. That’s what I chose to do.
Approx 5-10% of futures trading volume is retail per the last CME stat's I looked at. Retail futures day traders are the minnows, not the whales. IBs futues margins are to high - twice that of any other top tier retail brokers.