New Margin Rules IB and other brokers

Discussion in 'Retail Brokers' started by tntneo, May 27, 2001.

  1. tntneo

    tntneo Moderator

    Hi Def,

    Do you know how the new margin rules will be handled at IB ?

    I understand there are 2 ways to calculate max buy power in the new rule. Which one will you follow ?
    Do we really get 4-1 margin ? etc...

    I guess information regarding other brokers would be interesting to ET members.

    vpiNeo
     
  2. def

    def Interactive Brokers

    tntneo,
    I'm not sure. I'll try to get some info by the end of the week.

    Here are my thoughts though:
    I would have to guess that given IB's policy of no margin calls and automatic liquidation if there is not sufficient cash in an account, higher margin will be granted. The decision would probably be made after making sure there is minimal risk of a client defaulting on a loss to IB which in turn protects all clients from being hurt by the reckless trading/behavior of another client.
     
  3. Stephan1

    Stephan1

    Hi Def,

    what about this stupid 25000$ minimum cash in account for Daytrading? Will this become in effect, although IB has automatic liquidation witch causes less risk for IB than for other brokers?

    I have heard from another IB Supporter, that IB is "fighting" against this new SEC-rules for daytraders, is this correct? If yes, when will a final decision be evident?

    Thanks for your answer.

    sincerely
    Stephan
     
  4. def

    def Interactive Brokers

  5. Stephan1

    Stephan1

    Def,

    thanks for the interesting link.

    Please inform us, if any decisions of IB regarding this topic will be evident.

    sincerely
    Stephan
     
  6. dlincke

    dlincke

    That comment letter by IB that def pointed out is over a year old. The comment period for this new proposed rule has long expired and the rule has been officially approved by the SEC in the meantime. It is pretty much guaranteed that this rule will go into effect in September.
     
  7. virgin

    virgin

    Hey Guys,



    Will this 25000,-$ account minimum for daytrading
    also be for a futures account ????



    Virgin.
     
  8. tntneo

    tntneo Moderator

    No I don't think so.
    This rule is a blow to stock daytraders and specifit to stocks [and all brokers !]. The 4 to 1 margin might be interesting but obviously the limit of $25000 is not nice.

    I know it does not matter for professional traders, and therefore I do not care, but it is not good for brokers. And that is not good news for all of us. Less business means higher commissions.

    The letter from IB really gave good points why it is a rule which does not help its goal. Anyway, it is too late. We'll see.
     
  9. virgin

    virgin

    Tntneo,



    What makes you so sure that the rule will become
    effective soon ?



    Regards,
    Virgin.
     
  10. tntneo

    tntneo Moderator

    I am not sure. But let's say the trend is clear :)
    Momentum goes that direction..
    the regulatory bodies are for it, I guess they received pressure from the politician after the market's downturn, I don't know.

    What is sure and factual is the new rule. Unless something happens that's what it will be, in september if I am not mistaken.

    vpiNeo
     
    #10     May 28, 2001