IB Margin Violation Warning(Excess Liquidity??

Discussion in 'Retail Brokers' started by stocon, Jan 16, 2011.

  1. stocon

    stocon

    I got 1500 in an acct. I buy 30 qqqqs 4 mos. ago, they go up 10 points, but just recently I get 2 messages about Margin Violation Warning(Excess Liquidity). They say if I don't add some dough they are gonna sell the shares. They are paid for and no loan. What's going on?
    TIA,
    Steve
     
  2. cstfx

    cstfx

    Did you open a ticket and ask them? And what was their response? Could have been an error especially since thy are not margin and this is a Margin Violation error.

    Their info is going to be the most accurate.
     
  3. stocon

    stocon

    Ticket?? Can you quickly explain?
     
  4. cstfx

    cstfx

    A trouble ticket in your account management page. If you can, include the email either attach it or cut/paste it into your query.

    But further thought, I think that MAYBE the reason you got the message is that you have a margin account and your balance is below their required 2k minimum, and even tho the shares are paid in cash, they may still want that minimum or they will pull the margin access.
     
  5. stocon

    stocon

    Never mind I just send a message to them. A ticket? thx
     
  6. stocon

    stocon

    Good point but it was below a couple of grand prior to the purchase months ago. I sent the message with a cut and past of the problem. Probably should of been something about account minimum.
     
  7. Kirkx

    Kirkx

    You were just lucky at the time of purchase that your order went through. Usually when the account drops even 1 cent below 2k all orders are rejected, even for a stock or option that doesn't require any margin.
     
  8. stocon

    stocon

    I don't understand this could someone explain this


    Mr. XXXXXXXX,

    Thank you for your ticket. Your account currently has a positive cash balance and you are not using margin. As the positions in your account require 100% margin, you will have to maintain a positive cash balance in this case all the time (otherwise, your account will be under margin deficit and will trigger liquidations). Thank you.

    Regards,
    Mary Ng
    IB Customer Service
     
  9. IB-AN

    IB-AN Interactive Brokers

    To clarify, a broker dealer cannot, by regulation, offer margin privileges to an account maintaining equity below $2,000 (or USD equivalent). If an account holder's equity falls below that level, orders may still be accepted as long as the account maintains sufficient cash to pay for the long stock or option purchase in full (including commissions). Note that uncovered short positions can only be held in a margin account.

    While one may have paid for their securities positions if full and using no margin, they remain susceptible to a margin violation and position liquidation if their cash balance becomes negative and the positions have no loan value (due to account equity below $2,000 or the fact that the securities them self are subject to 100% margin). This situation could occur not from a change in the value of the long securities, which at worst become worthless, but rather the assessment of a fee such as market data or monthly activity fees which exceeds the cash balance on hand. That is why IB will send out warning notices when the financial capacity of the account approaches its limit (5% cushion).

    A more complete explanation of this warning notice can be found in the IB Knowledge Base via the following link: http://ibkb.interactivebrokers.com/node/226
     
  10. IB-AN

    IB-AN Interactive Brokers

    To clarify, a broker dealer cannot, by regulation, offer margin privileges to an account maintaining equity below $2,000 (or USD equivalent). If an account holder's equity falls below that level, orders may still be accepted as long as the account maintains sufficient cash to pay for the long stock or option purchase in full (including commissions). Note that uncovered short positions can only be held in a margin account.

    While one may have paid for their securities positions if full and using no margin, they remain susceptible to a margin violation and position liquidation if their cash balance becomes negative and the positions have no loan value (due to account equity below $2,000 or the fact that the securities them self are subject to 100% margin). This situation could occur not from a change in the value of the long securities, which at worst become worthless, but rather the assessment of a fee such as market data or monthly activity fees. That is why IB will send out warning notices when the financial capacity of the account approaches its limit (5% cushion)

    A more complete explanation of this warning notice can be found in the IB Knowledge Base via the following link: http://ibkb.interactivebrokers.com/node/226
     
    #10     Jan 20, 2011