Why is this "pass the risk on to the client"? IB could charge minimum margin and get some more commission from risky trader. I for one am happy that they don't push risk to the limit. The clients aren't risking anything, they just need to put in more capital to trade the contract they want.
This is good and expected. However they have been slow decreasing margin back down in the past when volatility calms back down. Which means if you want to increase lot size when that eventually happens IB wont let you, at least for a while.
I agree. (I don't still trade with IB, myself, for other unrelated reasons, but in principle I'd certainly want my broker to be risk-averse.)
Whoa man, I think you are waaaayyy off the mark. 1. In the '87, crash, Refco "discouraged SP trading.. but required $50,000 margin if the trader insisted". That high margin was to protect the trader as much as to protect the company. 2. Bull or Bear market... that's not the issue. It's a cushion against "expected volatility", up or down. 3. By "chasing off" weakly capitalized (and weak-hands) traders... that has a positive effect on all aspects of the "firm's liquidity". Commissions are small potatoes compared to uncollectible debits. 4. IB does not nor does it need to hedge traders' positions, though higher margins make trading safer for both the firm and the trader.
Anyone that holds over night leveraged products at the exchange minimums in this kind of market is an idiot.
I actually think futures offer too much leverage. Beginners blow up all the time from over leverage. I can lever up 3x based on notional value and still only using less than 25% of my buying powers.
I suspect if the volatility continues we could easily see YM initial at 10-15k...This will surely curtail retail. Then all you pros can trade with the pros.
If you have been very successful at trading futures for a good period of time, it is safe to say you are likely not trading at IB. Consistently high-profitable futures traders know very well how to trade optimally utilizing only exchange margins. And they have better use for idle excess trading cash. Albeit they are a distinct minority of those who regularly post, particularly in this site.
I can't find another broker that raised futures margins. The CME will give notice when they raise. Did anyone receive notice from IB?
This is second notice in a week timeframe. https://www.elitetrader.com/et/threads/cme-margin-increases-mark-ii.317961/ IB maybe did not let peeps know until it was already implemented by CME? That is a bad practice.