Australian customers, futures and margins.

A

Accipiter

I’m trying to get my head around IB and margin on US futures for Australians.

I have a ‘cash type’ account at the moment which has no margin obviously.

This difficult to find page - https://ibkr.info/article/2101 - has information that was not made known to me on application and approval from IB. The summary is:

As a result of recently imposed regulatory restrictions, IB has implemented a margin change, the effect of which is to restrict Australian residents from creating or increasing a margin loan.

Account holders who log into Account Management and affirm the Customer Agreement may continue to trade securities using cash...

The restriction applies to securities transactions and not futures or forex. Note, however, cash may not be transferred from the securities segment to support the margin required on a futures transaction if that transfer would serve to create or increase a margin loan within the securities segment.

On the IB Australia site - https://www.interactivebrokers.com.au/en/index.php?f=37725 - they have a ‘Margin Requirements Wizard’ which takes you to a page with the standard table of futures, including Globex ES displaying US$ 13200.

I’m sure this is misleading advertising under Australian consumer law, but I will accept that I’m simple and/or confused.

They also provide an email to contact which I still haven’t received a response, and as with the rest of customer service, will probably only provide a link to an irrelevant piece of online documentation.

I don’t want to become ‘that guy’, but this is starting to annoy me. Transferring money is kind of inconvenient, but the frustration of learning TWS now for no reason has left me a bit on edge.

Could someone please tell me I’m wrong and step through the process to fix it?
 
not sure about the specific details.

different countries have different requirements / restrictions which IB has to comply.
at times, information is not that readily available.
and helpdesk might not be of much help.
 
We need to remove the KB article, it is out of date. Short story. A number of years ago ASIC created a requirement for margin licensing. IBLLC had some guidance that we didn't need to obtain the license due to our structure. Further advice obtained at a later date disagreed, we went to ASIC who said we should have one and told us to stop offering margin immediately. Fast forward a number of years. IBAU was formed, all Australian residents have moved to IBAU from LLC. IBAU has obtained a margin license. Wholesale - pretty much no restrictions. Retail - non-recourse and we are somewhat limited on how much margin we can provide but we can offer margin if you qualify.
 
If I could delete the original post I would. I'm an idiot, RTFM, operator error. Thanks to HobbyTrading for that link. Mods can remove.

The documentation for IB is absolutely terrible with numerous types of accounts mentioned, no simple overviews and nothing at all being clear; to anyone new to this anyway. Unfortunately Youtube videos are more helpful and clear for the basics.

I understand to provide a cheaper service and cut costs, support has one person in Mumbai Googling IB content and just providing links to the confusing documentation, but in my case I just needed someone to step through the basics of the type of account I need, what is required in that account, and limitations. I accept IB is for professionals, not clowns like me.

Sorry to waste time and space, thanks for the responses.
 
Accipiter said:
If I could delete the original post I would. I'm an idiot, RTFM, operator error. Thanks to HobbyTrading for that link. Mods can remove.
More...
Please don't. Others had the same/similar question before you (example: yesterday I posted the same link in another thread here at ET). And again others will have the same/similar question in the future. Margin requirements are often opaque, and the answer to the question consists of "it depends".
 
HobbyTrading said:
Please don't. Others had the same/similar question before yo
More...

These things are generally due to chain of events. I know forums aren't for 'caring and sharing' but this started with me having 'insufficient cash' problems in my paper account with FX. I could buy but couldn't sell, as well as not initiate a sell. I had this nightmare scenario of real trading and not being able to exit a trade, only ending when my account balance emptied.

This was due to having a low balance secondary currency as well as it being a 'cash account'. This started the doubt without an explanation from IB or this forum; understandable as who would use a cash only account without margin for anything. Anyway, the nominal balance of the secondary currency was cleared after a few days, and the problem never appeared again.

Once you get rattled the madness begins, and for me it was not realising I needed a different type of account for margin trading; overlooking the absolute obvious. Also there is no mention at the top of the page on margin requirements for IB that ‘you need approval for a margin account’ to remind me and similar fools. I realised this last night trying to paper trade futures.

I searched for Australians and margin to find a post on Elite Trader that mentioned the no margin for Australians, the outdated IB page about it not being available and the madness builds. I then misreading the 100K in assets required; assuming that as 100K in the account.

Once the doubt and fear dominates, as in everything, the tunnel vision starts, reason ends and information is not taken in correctly.

I have applied and am now waiting for a margin/leveraged account to be approved with IB, which based on my previous experiences is not making me feel confident. So in the back of my mind I have this weight of having to go through the ordeal of looking for another broker that accepts Australians, trades US futures and doesn’t charge extortionate rates. Then the application process…

No, I’m not OK (Australian reference to mental health awareness), but I hope that changes soon.
 
Accipiter said:
Once the doubt and fear dominates, as in everything, the tunnel vision starts, reason ends and information is not taken in correctly.
More...
You have made the right decision by starting with paper trading and not jumping immediately to live trading. Now you learn the various aspects related to trading (and your trading account) that you only become aware of when you try out things yourself. One of those things is to keep your composure when things don't go as you had expected, or during adverse circumstances. Keep on experimenting with paper trading until you feel confident enough to make the step to live trading. And ask questions when there is something you don't understand. Good luck.
 
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