Good evening all, would appreciate information on the leverage advantage one would have with regards to portfolio versus span at IB. From speaking to rep at IB they have their own program when monitoring risk, and span is set by the exchange. Is there any way to compare in regards to figuring appropriate instruments to trade. Thanks!
Span is margin on futures and set by the exchange. PM is an alternative for Reg-T under certain conditions and is for equities and options only (equity and index,not futures options). Please use google to learn more.
Not 100% sure, but I recall SPAN to be "performed" twice a day, twelve hours apart, and implacable otherwise. PM is (what IB terms) "real time". If you have the cash to throw in, you want to go PM. You do NOT want to get near a 12-hour SPAN-ified account impingement. YUCK.
That cuts both ways. Real time means that they can change the margin requirements on you with no notice in real time and your portfolio that was fine 5 minutes ago is now generating a big margin call. Of course since IB doesn't do margin calls they just autoliquidate you, generally picking your most illiquid assets and selling them with market orders.