IB question

Discussion in 'Retail Brokers' started by asdfghj7, Dec 25, 2008.

  1. In a hypothectical Reg T account with IB, I have $500000.
    I added up how many shares in SPY would equal this amount.
    If SPY was at 100, then I could buy around 500 shares which would add up to $500000 total. My Reg T margin requirement would be $125000 I believe. In this situation, am I paying interest to IB on the $12500O to IB? If not, how much more stock would I have to buy before interest began to accrue. Also, where do I go on the tws platform and/or IB homepage to find what my margin ratio is from when I first signed up: 4 to 1, 3 to 1, or 2 to 1
    My buying power is usually 4 to 1 compared to my net liquidation value. Example
    When flat my net liquidation value would 200000 and my buying power would show 800000 on flat. This may help
     
  2. cstfx

    cstfx

    500*100 = 50,000
     
  3. In a hypothectical Reg T account with IB, I have $500000.
    I added up how many shares in SPY would equal this amount.
    If SPY was at 100, then I could buy around 5000 shares which would add up to $500000 total. My Reg T margin requirement would be $125000 I believe. In this situation, am I paying interest to IB on the $12500O to IB? If not, how much more stock would I have to buy before interest began to accrue. Also, where do I go on the tws platform and/or IB homepage to find what my margin ratio is from when I first signed up: 4 to 1, 3 to 1, or 2 to 1
    My buying power is usually 4 to 1 compared to my net liquidation value. Example
    When flat my net liquidation value would be 200000, and my buying power would show 800000 on flat. This may help
     
  4. cvds16

    cvds16

    if you have more than 5000 shares you pay interest on them. You can buy 20000 shares intraday, but just the slightest adverse move will cause some liquidation. You can have 10000 shares overnight.
    That's all there is to it.

    anybody with a 500000 would have portfolio margin however as this is better.
     
  5. Thanks for getting back to me. Assuming I added 500 shares to my original purchase taking the total to 550000 of new stock. I would then be paying interest on the 50000 I just added.

    In our 500000 account, if we purchase 20000 shares in the morning equaling two Million, do we 'have' to get rid of at least 10000 shares before the trading session ends to keep us at 2 to 1 at night?

    What would be the biggest advantage of a Porfolio account?
     
  6. cvds16

    cvds16

    yes
    yes
    and you get lesser margin thanks to diversification of your assets.
     
  7. cstfx

    cstfx

    Actually I believe you mean to say Portfolio Margin allows for GREATER margin power than Reg T, as you can have up to 6:1 with PM vs. 4:1 with Reg T (although you could end up with less if portfolio is not diversified properly)
     
  8. cvds16

    cvds16

    yes, I obviously didn't express myself too clearly.