IMHO IB changed margin calculation today drastically

Discussion in 'Retail Brokers' started by heilbronner1, Aug 19, 2011.

  1. Today IB liquidated two of my positions at very bad prices. There was no warning at all.

    Yesterday everything was OK.
    1) Enough buying power
    2) Enough current available funds.
    3) IB leveragae factor was 1.6

    1) Zero buying power
    2) Current available funds in the red zone.
    3) IB leverage factor is now 1.58
    3) I'm not able to enter new positions at this moment.

    There was no change in any trading positions.

    I contacted IB customer service. They think that everything is OK for them and they don't have any problems with their margin calculations.

    I' m really pissed. I'm a customer for over 10 years with IB and now they come up with such a issue.

    Any other customers with this kind of problem?

    I know it is difficult to sue IB but I am willing to do so.
  2. rmorse

    rmorse ET Sponsor

    That's the problem with dealing with an online firm. They don't always communicate well with their customers. I'm not sure if you have a Reg-T or Portfolio Margin account. With the VIX this high, many firms are raising margin requirements. An example; some firms put a minimum margin on short puts of $2.50. We had one client short the 2.50 puts in BAC, and the requirement was $2.50. That's max loss.

    Something you're trading received a premium on the margin calculation. You just need to find out what it was. Unfortunately they have that right, but they should communicate with you what the change is so you can cover or add money on your own. Auto liquidation is a result of poor communication and the broker keeping costs low and risk low to them.
  3. as i posted before, they've done this from time to time. they did it a few times back when they first released portfolio margin (changed the formula with little or no notice).

    by the way, are you sure they changed their formula? the bid/ask spreads have gone crazy lately and that could have resulted in the auto-liquidation