6:1 margin for overnight stock positions at InteractiveBrokers

Do you want IB to allow portfolio margin for accounts <100,000$

  • Yes

    Votes: 77 58.8%

  • No

    Votes: 54 41.2%
  • Total voters
    131
hello all-

Based on this thread I just applied for PM which may solve my biggest IB problem, ie., even tho my account is >100k I run into SMA problems frequently.

I hope that using PM will help.

I trade/hold extensive stock & option positions - often hedged.

EG, I have GOOG with both ITM & OTM covered call short postions. Other stocks are often played in similar way or via short puts when Bullish.

Do you think PM will answer my prayers re: SMA / Reg T liuidation notices that make me crazy to avoid the automated IB liquidations?

NOTE: I've got plenty of IB "war stories
and use 4 other brokers to a lesser extent none of whom enforce RegT like IB, ie, I get 3 days to cover RegT call rather than an auto liquidate.

Thx & regards --> hlu45
 
I would not recommend you to have only GOOG in the portfolio. If you concentrate on one stock, margin is close to 30%. Diversify if you want to do better than that. Generally PM works very well with option spreads. A nice thing is there is no notion of day and overnight margins. Margin is pretty stable during the day. An ugly thing is a possibility of a big margin change after new risk parameters are loaded after 2 AM EST. I would recommend margin check every morning before 9:40 AM EST when we can start auto-liquidation.
 
One thing I don't understand is why so many people voted against PM for account below 100,000$?

What possible reason could they have not to want IB to allow it for smaller accounts, are they just being mindful of other people's money and risk levels? :confused:
 
ids,

Is there a "guideline" on IB's website for understanding this portfolio margin capability better? I now have it enabled/approved but am still not sure of how much "buying power" I have available.

Under the "old system" I knew my buying power was x2 overnight and x4 intraday.

What are the key ratios with portfolio margin?

Do the old 4xacct equity still apply intraday? How about overnight?

Thanks!


Quote from ids:

I would not recommend you to have only GOOG in the portfolio. If you concentrate on one stock, margin is close to 30%. Diversify if you want to do better than that. Generally PM works very well with option spreads. A nice thing is there is no notion of day and overnight margins. Margin is pretty stable during the day. An ugly thing is a possibility of a big margin change after new risk parameters are loaded after 2 AM EST. I would recommend margin check every morning before 9:40 AM EST when we can start auto-liquidation.
More...
 
Quote from risktaker:

. . .Under the "old system" I knew my buying power was x2 overnight and x4 intraday. . .

What are the key ratios with portfolio margin?
More...
I don't have it yet, but I am looking at portfolio margining. It is my understanding that you have to estimate your buying power with PM, and that trial & error are all you have to go on. Once you have a position on, you should be able to read the margin requirement directly on the account page. In theory at least and depending on your portfolio, your buying power could actually drop under PM. Unless you have multiple positions on at the same time, you should not choose PM.

I asked IB support what happens if I buy something at the close that exceeds my buying power. All the rep could say was that positions would be subject to liquidation. I asked what happens if there is no liquidity (outside RTH), and the support person had no answer.

[rwk]
 
I didn't see this mentioned, so forgive me if it has. But you can click the small Try PM button in the upper RH corner of the TWS Account page. It compares regular and PM.

For example my regular margin is (based on Securities GPV/Margin) 3.4 times.

For PM it is 5.7.

I currently have a mix of long and short stock (mostly short) and a few long options (puts and calls). I think I'll eventually switch to PM. Still worried that I'm missing some risk and I'll get pounded at some point. I hate it when that happens...
 
I'm trying to come up with some general guidelines. For example, say I have NO positions and $100,000 in an account. Under the Reg T system, I could plan on having a maximum of $400,000 intraday buying power (4x equity). With PM, what should I plan on?

Quote from rwk:

I don't have it yet, but I am looking at portfolio margining. It is my understanding that you have to estimate your buying power with PM, and that trial & error are all you have to go on. Once you have a position on, you should be able to read the margin requirement directly on the account page. In theory at least and depending on your portfolio, your buying power could actually drop under PM. Unless you have multiple positions on at the same time, you should not choose PM.

I asked IB support what happens if I buy something at the close that exceeds my buying power. All the rep could say was that positions would be subject to liquidation. I asked what happens if there is no liquidity (outside RTH), and the support person had no answer.

[rwk]
More...
 
Quote from Wayne Gibbous:

I didn't see this mentioned, so forgive me if it has. But you can click the small Try PM button in the upper RH corner of the TWS Account page. It compares regular and PM...
More...
I did see a mention of that elsewhere, but I cannot find it on my copy of the TWS. I am running version 872.6. I tried opening a position in the papertrader and still no button.

[rwk]
 
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