Upcoming Change Margin Change (Implied-Volatility) (.. ) A component of Interactive Brokers House Margin is implied-volatility stresses of +/-15%; the results of these stresses are factored into margin requirement calculations. This communication is to inform you of an upcoming change to this algorithm with respect to these implied volatility stresses. • Broad Based Index: The implied Volatility Stress will be increased to +/- 75% • All remaining classes: The implied Volatility Stress will be increased to +/- 150% This change in the margin calculations is scheduled to be implemented in a series of 20% daily increments over a 5-business-day period. The first change will be made before the US open on March 20, 2017 and will conclude before the US open on March 24, 2017. (.. ) Consistent with our stated policy, accounts that are unable to carry the positions under these new margin requirements are subject to automated liquidations in order to bring the account into margin compliance.
I'd say this is related to the upcoming expiration of the US debt ceiling holiday on March 15 but IB's dates start on March 20. A lot of the doomers on the internet are saying March 15 will be the end of the current bull run.
There is a very big jump in SPX option premium starting on the Mar15 expiry. I have only thus-far attached it to the failure (until recently) to pick up on FOMC cues with regard to the March meeting. I haven't heard enough to accord that more (as in, End Of The Bull Market As We Know It -- EOTBMAWKI. {"Huh! Cute!"})
i haven't noticed this message yet, but suspect it will show up soon (IB UK account) and i'm a bit aghast with IB margin limitations, which hurt trading sometimes. So don't apreciate seeing it get any worse. Any other broker that offer portfolio margin, a wide range of markets and decent margin rates while accepting overseas traders ? It's not the first time i check btw, never found anything much interesting, but probably have missed a bunch, especially UK based. Also fwiw I checked with ABN amro and Newedge when i was doing significantly more volume than now and they declined opening an account.
Truetype where did you get that information ? I suspect if the message had been widely disseminated by IB this thread would have many more hits.
What is the context of this margin notice? Looking at IB's complex margin rules it would appear that this only affects Portfolio Margin and only for short options under Portfolio Margin. Doesn't appear to make sense for anything else.
I have portfolio margin at IB, and I am always short options contracts. I did not receive that notice.
It's a very lucrative source of revenue for these firms...Goose the margin requirements and the auto-liquidate algo can clean up...Heck, think about the money rolling in on August 24, 2015.
Give me a break. There are plenty of bad things to say about IB, but their auto liquidate algo is not a major revenue source and is not intended to be one. Please give a realistic estimate of how many thousands of dollars IB made from auto liquidation revenue on August 24, 2015. For real world comparison IB lost over $120 million on the Swiss Franc move in January 2015. Brokers have the right to protect their own and other customers capital.