People believe that automating margin calls like this helps hold IB's costs down. I use IB for futures and options - low price, great execution - but when I trade volatile stocks that brokers are likely to change to 100% margin, such as FRE and FNM, I do it at Schwab and Fidelity, which have offices everywhere. If I need to, I can stop by an office the following morning and drop off a check.
Margin deposit on futures will not disappear no matter what happens to IB since it is in the hand of the clearinghouses, which is AAA? is that correct?
You don't have to worry about futures margin cash at IB for 3 reasons: IB is well capitalized, vast majority of cash and assets are on the securites side and aggressive risk management of futures positions. You have to worry at a pure futures brokers that a big loss from other customers will wipe out the firm's capital and consume some of the solvent customers cash. The fact that the margin is held by the clearing house doesn't matter if the losses exceed the firm's capital.
zdreg Registered: Oct 2003 Posts: 2941 07-13-08 06:27 PM Quote from vikana: IB documents how/when they liquidate. There are even settings in TWS where you get to determine what to liquidate first. I like the fact that they work to ensure that margin calls don't spread beyond the accounts they happen in. If you don't like it, there are many other good brokers who give you 3 days to transfer additional funds. in a crisis watch that 3 day privilege disappear.
you have no business trading in a way that any size drop will take you out. as a customer of ib i want them to look out for situations like yours and take measures to protect the other customers.