"NOTICE OF MARGIN INCREASE" for futures with "average daily volume less than 10,000 contracts"

Discussion in 'Interactive Brokers' started by newbunch, Feb 21, 2021 at 2:07 PM.

  1. Am I the only one who received this notice from IB? I got it on February 11, but didn't share until now because I assumed others would have.

    Dear Trader,

    The Standard Portfolio Analysis of Risk (SPAN) is a methodology developed by the CME and used by many clearinghouses and exchanges around the world to calculate the Performance Bond (i.e., margin requirement) on futures and options on futures. SPAN establishes margin by determining what the potential worst-case loss a portfolio will sustain over a given time frame (typically set to one day), using a set of hypothetical market scenarios which reflect changes to the underlying price of the future or option contract and, in the case of options, time decay and a change in implied volatility.

    Currently, IBKR may require margin above the SPAN requirement using a risk multiplier, which is determined by recent volatility in the underlying futures product. IBKR will begin implementing this same risk multiplier for commodity products with lower liquidity. As a result, the required house margin is likely to increase for many commodities products that have an average daily volume less than 10,000 contracts.

    This new requirement will be phased in over a series of daily increments, beginning for trade date February 12, 2021, through trade date February 19, 2021.

    The effect of this change on the margin treatment is NOT expected to result in a margin deficit in your account ******** based upon calculations at the time of our initial review. However, as market conditions and/or positions and equity within the account may have changed since the time of the initial study you should examine your portfolio and determine if these changes will create any capital (margin) deficiencies in your account.

    Consistent with our stated policy, accounts that are unable to carry a position under this new margin requirement are subject to liquidations to bring the account into margin compliance.

    Please contact your local Client Service center should you have any questions regarding this notice.

    Interactive Brokers Client Services​

    Of course, they didn't tell me how much the margin would increase, and now I am seeing that I am bumping up against my limit whereas before I had plenty of available margin.
     
    PennySnatch likes this.
  2. Move your futures trading to another broker..like AMP or Deep Discount Trading, etc.
     
  3. maxinger

    maxinger

    For every one NOTICE OF MARGIN DECREASE' notice,

    there will be

    1 000 000 NOTICE OF MARGIN INCREASE ' notice.
     
  4. I received the same message on the same date. I didn't see a need to post it at ET.
    Their changes had no material impact on my account. The margin requirements have gradually increased from Feb 12th until today, but that might have been caused by me expanding my position sizes.
     
    newbunch likes this.
  5. Do either of them offer futures on the Canadian Derivatives Exchange/Montreal Exchange (for Canadian Treasuries) or the Canola contract on ICE Canada? I don't see them listen on either brokers' website.
     
  6. Either I was closer to using up my available margin or I trade more low-volume contracts, probably both.