50% stock margin after 3:50 EST ?

F

futurecurrents

I hope I'm not the only one to not know this. Just found out today when a position was liquidated early (3:52 EST). It was an Interactive Broker account. The customer rep said it's part of the PDT regulations. I wonder what else there is that I don't know about that could hurt me.

I guess it is a heads up to stay informed and read the small boring print.

***************************************


"Did I do anything wrong today, or has the world always been like this and I've been too wrapped up in myself to notice?"
- Arthur Dent (Douglas Adams, The Hitchhiker's Guide to the Galaxy)
 
Quote from futurecurrents:

I hope I'm not the only one to not know this. Just found out today when a position was liquidated early (3:52 EST). It was an Interactive Broker account. The customer rep said it's part of the PDT regulations. I wonder what else there is that I don't know about that could hurt me.

I guess it is a heads up to stay informed and read the small boring print.
More...

thanks! where is it on the site that describes the process?
 
yeah this is bullshit...

i have two different numbers in my margin figure...

the 3:50-4:00 also has both an initial and a maintenance number...

luckily i'm high strung and rarely go above 20% margin...

gotta love the clowns at the SEC...they should be 'mandated' themselves to take some math classes.
 
Initial Margin Requirements

At the time of the trade, the trade must be within the Day Trading Buying Power, and maintenance margin levels must be satisfied. If new transactions during the day increase the size of existing positions or establish new positions and are not closed by 15:50, then the account must also satisfy Reg. T margin levels (see above) for the new (or expanded) positions to be maintained in the account overnight. If at 15:50 Reg. T margin requirements are not satisfied, new transactions (but not pre-existing positions) will be liquidated so as to avoid the issuance of a Reg. T margin call. Those customers subject to Day Trading Buying Power Restrictions, will have two lines added to their TWS Account Window; 15:50 - 16:00 ET Initial Margin and 15:50 - 16:00 ET Maintenance Margin. These calculations will be used between 15:50 - 16:00 ET to determine margin requirements.


.....

it sounds like only new positions (taken after 1550) are liquidated. this surely is confusing.
 
Quote from funky:

Initial Margin Requirements

At the time of the trade, the trade must be within the Day Trading Buying Power, and maintenance margin levels must be satisfied. If new transactions during the day increase the size of existing positions or establish new positions and are not closed by 15:50, then the account must also satisfy Reg. T margin levels (see above) for the new (or expanded) positions to be maintained in the account overnight. If at 15:50 Reg. T margin requirements are not satisfied, new transactions (but not pre-existing positions) will be liquidated so as to avoid the issuance of a Reg. T margin call. Those customers subject to Day Trading Buying Power Restrictions, will have two lines added to their TWS Account Window; 15:50 - 16:00 ET Initial Margin and 15:50 - 16:00 ET Maintenance Margin. These calculations will be used between 15:50 - 16:00 ET to determine margin requirements.


.....

it sounds like only new positions (taken after 1550) are liquidated. this surely is confusing.
More...

****************************

It is confusing. It seems the new positions refer to any positions taken that day. At 3:50 the margin goes to 50% because if it's held overnight that's what the margin req would be. So to avoid being in violation they may, but don't have to!, liquidate positions to bring the account into compliance.

The thing that was scary was that I had a moc order in for the stock that was sold, so when the moc order executed I ended up being short and had to cover after hours. I didn't lose much but it could have been bad.
 
Quote from futurecurrents:



****************************

It is confusing. It seems the new positions refer to any positions taken that day. At 3:50 the margin goes to 50% because if it's held overnight that's what the margin req would be. So to avoid being in violation they may, but don't have to!, liquidate positions to bring the account into compliance.

The thing that was scary was that I had a moc order in for the stock that was sold, so when the moc order executed I ended up being short and had to cover after hours. I didn't lose much but it could have been bad.
More...

wow, that's messed up. why would your short position be allowed? wouldn't that order have violated margin requirements?
 
Quote from funky:



wow, that's messed up. why would your short position be allowed? wouldn't that order have violated margin requirements?
More...

+++++++++++++++++++

I had other positions that were being sold moc so I guess they covered it.
 
My account with Brownco never required margin. My account with IB is popping up also with initial margin of 20% each morning and sometimes 40 plus percent for the last ten minutes of the trade day. On some days, however, there is no late margin requirement even though I have traded during the day. Since all my shares are paid for and I have only covered options in my account and I have a true cash balance. my question is why do I have any margin requirement of any kind? Can anyone answer?.
 
Quote from futurecurrents:

It is confusing. It seems the new positions refer to any positions taken that day. At 3:50 the margin goes to 50% because if it's held overnight that's what the margin req would be. So to avoid being in violation they may, but don't have to!, liquidate positions to bring the account into compliance.

The thing that was scary was that I had a moc order in for the stock that was sold, so when the moc order executed I ended up being short and had to cover after hours. I didn't lose much but it could have been bad.
More...
In general when TWS performs auto-liquidation it will cancel your open orders (or adjust quantity). The problem in your case might be that it was a MOC order for NYSE (instead of LMT or STP order). You should check NYSE regulations to find out what they will do with a cancel request for a MOC order arriving at 3:52 pm ET. My guess is that they might refuse to accept cancel/modify requests for MOC orders after 3:40 pm ET.
 
You must log in or register to reply here.
Back
Top