Correct me if I'm wrong since I'm not an arbitrage trader. They shouldn't choose IB anyway because IB requires too much margin (even overnight margin for daytrading some liquid futures :eek: ). They should pick a firm which provide competitive margin for this kind of trading style.
I am correcting you as you are wrong. You obviously haven't checked the margin tables for Asian futures posted on our site.
I think you should check before you post. You obviously don't check the whole table before you comment (really?). There are some futures which still require overnight margin for daytrading. I'm glad if you can prove me wrong. Please ask if you can't see them for some reason. I can point them out for you. 50% margin is already not competitive. Well IB goes even further and requires 100% margin. I don't see how this will suit scalpers or arbitragers or very short-term daytrading.
The Asian markets are 50% - please show me one that isn't. If you think this is to high then we aren't the firm for you. There is a balance between protecting the firm, our client base and the wishes of those who want to maximize leverage. Today's a good case in point. We're looking at upwards of 3% moves in Japan, Korea and Hong Kong. Hong Kong yesterday had a 1200 point intra day range. I know you don't find this a selling point but in these uncertain times I am certain that many of our clients carrying large balances with us are extremely comfortable with our policy and choose to be with us because of our strong capital position and financial stability.
OK I will point to you where intraday futures are still charged 100%. Interesting to know an employee from IB knows less than a normal person. Go to http://individuals.interactivebrokers.com/en/trading/marginRequirements/margin.php?ib_entity=llc Click on Futures Search for some US markets Some of the futures are required 100% margin. (Ask for more hints if you still can't see it) There is a line whether how much margin is sufficient enough to protect the firm and clients. I have never see any firm who will charge 100% intraday margin. Provided that many conservative firms take 50% and are still fine, the argument of requiring 100% doesn't hold water unless IB suggest it is the only safe firm on the planet in the unknown times (you are the only one who dare(?) to require 100% margin for daytrading). There are 2 kinds of firms which go to the extreme. The first kind is the $500-margin-ES firms. I am fine with $500 but the firms are not fine. The second kind is IB which can think of requiring 100% margin for some futures. Early on, 100% margin applied to most intraday futures. IB only forced to change back after 2 months of complaints over the forum. Anyway this case shows how risk-averse IB is. What a myth! HSI won't drop 1200 in minutes. I seriously doubt any daytrader who can buy at the very top and wait so long until 1200 points worth of dollar vanished before he takes action to close out. IB will do even if he insist on holding a losing position after all. Go ask any scalper to hold more margin because the so-called 1200 point intraday range. I don't see how this can be a selling point. LOL
My line above says ASIAN markets. I have a slight inkling that this "abnormal" person knows a bit more than you about the Asian markets. Yes, it is unlikely for the HSI to have such a move in seconds - although that could happen over the lunch break - but the market can move 100's of points at a clip with low liquidity. Unfortunately, not all clients are as astute as you and cut their losses before things get out of hand.
Just a note that the lunchtime gap on HSI today was 573 points ... that's close to $3700 per contract lost if you were short. 4 minutes later it reached 882 points or US$5680 if you had held for a quick bounce back (and had to exit then ).