IB Margin?!

Discussion in 'Retail Brokers' started by orange_trad, Feb 25, 2008.

  1. Soo... Can anyone explain to me how IB's margin requirements work on IDEALPRO? The reason I ask is when I click on 'Account' in TWS I see 'Available for Trading' bouncing all over the place. For example right now it quotes me a JPY/EUR exchange rate of 0.00618 the equivalent of 161.81 EUR/JPY. Now that's a measly 106 pips away from market price that they quote correctly in the very same window. I checked IDEAL's prices also, its 2 pips +/- IDEALPRO (not always the case, this morning I saw IDEAL's prices a 100 pip away from IDEALPRO).

    The trouble with all this is that if my 'Available for Trading' dips below 0 IB liquidates my positions and if they do they will liquidate me at these despicable prices. In effect I would have to decrease my leverage regardless of the market price, just to avoid a margin call.

    So, does anybody know how IB calculates the 'Available for Trading' amounts and how on earth do they come up with the 'Exchange rates' in the 'Market Value' section?
  2. Hm. Well over a hundred views and nobody seems to know about this issue. Or care. Is it because:
    a) nobody knows
    b) nobody cares
    c) nobody understands the previous post.
  3. Probably "a".

    Send them an email or give them a call to see if they can clear it up for you.

    If they can't, find a broker who can. :cool:

    Good Luck.
  4. I don't think you need to be as concerned about that for a margin call with IB. Per my understanding, if you fall within PDT rules you need to be concerned with the Equity with Loan Value being 25,000 or greater to avoid margin calls.
  5. MandelbrotSet: I was fearing nobody knew. Simultaneously to my OP I also posted the question to IB in the form of a trouble ticket. Sofar ET has much better CS for IB than IB itself, but who's surprised?

    riskymove: PDT doesn't apply to me since I don't trade American equities. I have discovered this issue trading IDEALPRO (foreign currency platform), thus 25k (which is peanuts) is not the issue.

    But more to the point, I'm worried about this method of calculating margin requirements to the point that I dare to say that IB is a bucketshop. Only they don't run customer positions by putting in 'spikes' and 'requotes' etc. in your feed, they do this through elevating your margin requirements to artificially squeeze you out of your positions and liquidate at prices way above the market. Now granted, foreign exchange - not regulated, they can do that probably without breaking any law (and reputation is not law). But what if they do it with several other instruments (equities, bonds, etc.)?

    I still give them the benefit of the doubt, until something happens with my trouble ticket with them - or someone can maybe point it out where my assumptions are wrong? Anyway, thanks for the replies.
  6. I traded futures and options on futures with IB and could never figure out how they get their margin required numbers. Their margins never agreed with the SPAN numbers from the exchanges. I've seen IB's margins change by $5,000 from one minute to the next and the underlying had barely moved. IB denies this. Maybe they don't know it happens. I talked to the manger of customer service and he claimed the exchanges calculate the margins for them. I know that's not true.
  7. ids


    I claim the following:
    1. Our margins for futures and futures options are calculated by SPAN.
    2. We require minimum $50 per future and $25-$50 for option. It is not a big deal.
    3. We add extra charge for deep out of money options because we believe that there is too much risk in them under current market conditions.
    4. We do change margin during the day if market moves violently.

    What is your source of "SPAN numbers from exchanges"? Please provide at least one concrete example.

    Sorry, I have no idea how FX margins are calculated.
  8. My source for the SPAN risk parameter file is the CME. Files are updated four times a day 10:30, 12:00, 3:15 & 5:00 CT. I can't provide example or the difference between SPAN and IB margin requirements. I closed my IB account after getting margin calls when IB didn't go to standard day margins from overnight margins when the market opened with the DOW down 400 points the day after MLK day. The only broker I know of to do so.

    It would be a great service to IB's customers if they knew exactly how and when IB calculates margin. It's very important to know how much cash is going to be tied up before you put the trade on.
  9. #10     Mar 3, 2008