Question to IB: How is a margin call handled in detail?

Discussion in 'Forex Brokers' started by JLarsen, Jul 21, 2006.

  1. JLarsen


    Dear IB,

    I have a question, concerning handling of margin calls at IB forex plattfor IDEALPRO.

    I am sure, the answer will be of interst for many ET member trading at IB.

    Here the question:
    I hope it never happens, but I am wondering about how a margin call
    at IDEALPRO is handled exactly.

    Imagine the following situation:

    My Account is at EUR 12.000 and I am trading EURCHF

    I make 5 trades each Volume 100.000 EUR, ending up with EUR 500.000
    at 2% Margin needed. Used Margin is EUR 10.000.

    Now Price drops heavy by 0.5 % equals to EUR 2.500 (or 75 pips) .

    What happens now exectly on my account?

    a) Will my EURCHF Position will be closed completely, after my ealtime Account Equity
    goes below the margin requirements (EUR 10.000)?


    b) At Account Equity of EUR 10.000 (= Used Margin) just ONE position of EUR be liquidated and I
    carry on running with EUR 400.000 in EURCHF (so I have again EUR 2000 unused margin) ?


    c) will procedure b) happen, but instead of Lots at EUR 100.000 in smaller amount of minimun trade
    sice (=EUR 20.000), which will generate more trades (= comissions)

    d) ????

    Thanks IB for an detailed explaination