Your reasoning is flawed. Margin requirements have always been based on current or historic volatility. Never on "what if"-scenarios. Otherwise we are all trading scared money. Margin for YM is currently 3125. Or we going to see a 625 drop in a single day? Perhaps. Or we going to see it happen in less than an hour? Very unlikely. Is it going to plunge in a minute? Ridiculous. So unless IB's margin liquidation software is malfunctioning...
Who cares about IB's margin liquidation software when the exchange is down? Do you have enough liquidity in your account to handle whatever may happen? If you barely have enough equity to cover your existing position, how will you ever manage to put on a hedge when (not if) the exchange goes down with "technical difficulties" and only reopens the following day?
"very unlikely" events happen, and I for one am pleased that IB have taken the necessary steps to protect my funds. And when the less well protected brokers start liquidating their clients accounts en-mass just watch that baby plunge! It's per-minute falls at the height of 9-11 were pretty large...
The risk of having the exchange down is one that has always existed and always will. In fact it happened on the YM not so long ago. If you barely have enough equity to cover let alone hedge, than that's your problem. I don't see any reason whatsoever why this suddenly would become another excuse to raise margins. "Technical difficulties" have happened and will happen before. All this has little or no relevance to what's happening with the margins today.
It's time the "voices of reason" spoke up against this IB margin scam. In truth, they want to discourage daytraders; that's their likely agenda. There is no other reason for intraday margin to be doubled, in most cases, and for that to "spill over" into non-equities related futures as well, such as Agriculturals, etc. Reasonable arguments in this thread have shown that to my satisfaction. Yeah, an asteroid could hit the Earth... So let's have NO MARGIN at all for anybody at all. Make sense? ha ha FS
proactive futures margin per spu mini is around $500 intraday and $3500 overnite so with $5k you could trade 8-10 contracts theoretically,more like 6-8.
Since fourth quarter 2006 IB financials show doubtful acounts of $1m. http://www.interactivebrokers.com/download/IB_LLC_4Q06_Aud_Finls.pdf
the point that is what those hedge fund investors (speculators) give those hedge fund managers to do...gamble. those speculators of these hedge fund managers want risk. you will get risk.
There must be some other reason for any successful futures daytrader to trade at IB when they could get "professional" rate (margins and commissions) at any number of Chicago's future trading firms.