Margin Impact?

Discussion in 'Interactive Brokers' started by kakao, Mar 11, 2020.

  1. kakao

    kakao

    Hello, i am a newbie and trying to understand "Margin Impact".

    I want to buy 5,000 Shares, Limit Price 1.00 $ and it makes totally 5,022.50 $ (incl. Comission) . This is clear.

    But the cash i need to pay variates depending on stocks. Please check the photos attached.

    For NEPT i need to pay 1,600 $ but for APOP 3,785 $.

    Can someone explain to me this "Margin Impact" column?

    [​IMG]
    [​IMG]
     
  2. It's a function of the instrument's volatility. Not sure if they publish their formula.
     
  3. qwerty11

    qwerty11

    No it has nothing to do with volatility...

    If you buy the stocks for $1 the profit will be bigger with APOP than with NEPT (because the market is 1.75 and 1.33 resp.)
     
  4. kakao

    kakao

    But i just want to buy 5,000 shares and it makes 5,025.00 (incl. Comission est.)

    Why does IB give 1,600$ to me?

    And Maintenance Margin is 6,625$. What does it mean for me?
     
  5. qwerty11

    qwerty11

    They give 1600 to you because you are beating the market with 25%
     
  6. kakao

    kakao

    Let's assume i've clicked the override and trasmit. 1,000 Shares x 45.00 $ = 45,000 $.

    What does 11,348$ (initial margin and maintenance margin) mean for me?

    [​IMG]
     
  7. qwerty11

    qwerty11

    that $11348 of your assets is locked (intraday) to hold this position (note that mainly maintenance is important)
     
  8. kakao

    kakao

    Let's assume the next share price will be to 22.50$ (-50% decrease).

    What happens?
     
  9. qwerty11

    qwerty11

    then maintenance is 50% of 11348...
     
  10. kakao

    kakao

    I mean after that i 've bought the stocks under the conditions as stated above, price of stock decreases -50% and my position will be 22,500$.

    - There is no margin call at 25,500$ right? And when is the margin call? If position decreases to 11,348$?
    - What if, i want to sell stocks at 22.50$ x 1000 Shares = 22,500$?
     
    #10     Mar 11, 2020