I just noticed: IB now charges 53% more margin for ES than the exchange & other brokers. ES overnight exchange margin = $5,225, IB's = $7,969.78! LOL.
"IB now charges 53% more margin for ES than the exchange & other brokers. ES overnight exchange margin = $5,225, IB's = $7,969.78! LOL." You can guess why. I mean, I know they make money and all, but *Jeez* if I were them (and were thinking about 98% of ES traders), I'd be shaking in my boots. Think of it this way, too: if you're an idiot, you're going to get in TWS, generate $20k-$30k of commissions, and then flame out and "Poof!" you're gone, in a tiny puff of smoke/ash. If you're serious, you're going to come with some capital, and generate the same $20k-$30k to IB, but then, you're going to do it again. And again. And again. I'm sure it's not a one-to-one relationship, but I bet there's some solid statistical grounding to it: more capital == better (longer) trading life == better stream of revenue to IB per operating $$. I've got a dollar on this one. Maybe a ($reduced) pint (on Monday nights). "People who have deposited $84 Billion in IB are quite happy about this. You can change brokers." Meanie. "IB now charges 53% more margin for ES than the exchange & other brokers. ES overnight exchange margin = $5,225, IB's = $7,969.78! LOL." Yeahhhhhh. Chuckle chuckly chuckle. But wait -- call IB's overnight an even $8k. At $50 a point, how many points does that imply, for an overnight move? How many? How many times have we seen such a move, in the last 2-3 years?? Hmmmmmm. Hmmmmmm. Jeeeeeez. "Upon reflection, it seems the exchange standard should meet IB, not the other way around....."
Even with increase is margins, you think the ones IB wants to keep are going to care? Those who are trading size for longer term positions exposes huge risk regarding a huge drop, no many how seasoned the trader, when losses get large, they stop thinking logical and go into all and nothing mode "it just have to reverse" and before they know it, nothing left or in the whole cause perhaps market is moving in points instead of ticks. Bigger traders are more risk than medium traders for brokerages. And small traders are usually under funded so more risk.
If you are a serious LONG-TERM SUCCESSFUL futures trader doing size, you would be hard-pressed to justify the opportunity cost of keeping way more capital than needed in your account trading at IB. And only traders who do not fit those criteria would disagree.
Pooh. "Doing size" means anything large enough to justify a Chicago seat -- and any number of individual traders *could* choose to do that. But there are other costs that come with that -- *fixed* costs, that would benefit from further business (read: "non-individual") development. So? But at half that size, there are plenty of individual traders for whom a seat lease is not a viable cost, and for whom IB's "enhanced" margin requirements are just not an issue. And only traders who do not fit those criteria (successful, reliable, robust record) would disagree.
The IB account is called a universal account. It is a securities account regulated by the SEC and a futures account regulated by the CFTC. You can be long stock, collecting dividends, and use this as margin for long/short futures or long/short options on futures. If you just want a futures account and stay in cash or tbills with lower margins then you should look elsewhere.