Margin for futures at IB

Discussion in 'Interactive Brokers' started by trangreg, May 13, 2007.

  1. trangreg

    trangreg

    I'm new to trading futures and have opened a paper trading account at IB. I'm a swing trader so I will be holding positions overnight. For example purposes, let's say I buy 1 contract of Cotton at 49. My overnight initial margin would be $1350 and overnight maintenance margin drops to $1000. The price for the following day drops to 48.50. That would be a loss of $250 (50 x $5). Lets's say I have $3000 in cash and average of $2000 worth of equity in my stocks. $1000 is set aside already for overnight maintenace margin. Would IB take $250 away from my $3000 cash to cover the loss for that particular day? If it was a gain of $250, they would add $250 to my cash? This would go on for each night I hold the position until I close the position out?

    This is how they explain it on their website, known as mark-to-market accounting. I think this is how it shows on the paper trading account statements. I called customer service but they didn't understand my question. Any help would be greatly appreciated!