IB Special Margin Rates

Discussion in 'Interactive Brokers' started by iTradeOptions, Dec 31, 2019.

  1. Can someone please explain why some securities have "special" margin requirements? I understand that if a security has a 100% margin requirement, it means that the broker sees the security as more risky, thus it wont lend you money to buy it. So does this mean that if a stock only has a 25% initial margin (and a 20% maintenance margin) that the broker sees the security as less risky? I dont see another reason why a broker would let someone get more leveraged than usual on a security unless they viewed that security very favorably. Thus, if they are only requiring a 25% margin, they are saying they REALLY like the stock, compared to one with a regular 50% margin or higher.

    Is this correct?
     
  2. I don't know how they calculate it, but I'd say historical volatility and market cap play a big role here.
     
  3. Could be anything. Market cap, average daily volume, volatility, recent price moves, concentration risk, free float, news and so on and so on.
     
  4. cvds16

    cvds16

    certainly not en endorsment to enter a buy or sell order ...
     
    zdreg likes this.