Australian customers, futures and margins.

[Accipiter]

For anyone following, you do need USD 110 k to be able to open a margin account with IB to be able to trade US futures on margin, or anything for that matter. Margin wasn't offered to Australians previously, now it is with 110 K cash balance, or in liquid assets.

From the documentation:

Portfolio Margin Eligibility:

An existing account must have at least USD 110,000 (or USD equivalent) in Net Liquidation Value to be eligible to upgrade to a Portfolio Margin account…

 

[def]

For anyone following, you do need USD 110 k to be able to open a margin account with IB to be able to trade US futures on margin, or anything for that matter. Margin wasn't offered to Australians previously, now it is with 110 K cash balance, or in liquid assets.

From the documentation:

Portfolio Margin Eligibility:

An existing account must have at least USD 110,000 (or USD equivalent) in Net Liquidation Value to be eligible to upgrade to a Portfolio Margin account…

You are not correct.

Portfolio margin is a US concept. You do not need 110K to open a margin account. You would need that only to get PM under IBLLC (which is a FINRA guideline).

In Australia net worth and and income are the components used to determine if margin can be granted to retail clients. There is no minimum deposit to have the account approved for margin. just 2K to utilize margin. Liquid net worth has to be over 100K or income over 40K for natural retail persons which is unrelated to a balance requirement.

 

[Accipiter]

iquid net worth has to be over 100K or income over 40K

I am happy to stand corrected. If I don't have over 100K in cash, in my account or anywhere else I can get a margin portfolio if I earn over 40k?

A Portfolio Margin account is what I have applied to upgrade to, as there is no other options.

I wish this was clear in the docs and you had stated this initially, as I sound simple and confused, and need an appropriately simple answer.

Please step me through how to get margin for futures. What type of account do I need, how do I get it, what else do I have to apply for?

I just emptied my IB account to look for something else.

Anyone else more helpful?

 

[def]

I am happy to stand corrected. If I don't have over 100K in cash, in my account or anywhere else I can get a margin portfolio if I earn over 40k?

A Portfolio Margin account is what I have applied to upgrade to, as there is no other options.

I wish this was clear in the docs and you had stated this initially, as I sound simple and confused, and need an appropriately simple answer.

Please step me through how to get margin for futures. What type of account do I need, how do I get it, what else do I have to apply for?

I just emptied my IB account to look for something else.

Anyone else more helpful?

If you are from Australia - which I presume you are. There is no documentation as there is no specific "portfolio margin" privilege is that is a US concept. You can request margin permission and if granted, you will have some level of margin. So in short, if you are looking to trade US futures, assuming you qualify for margin permission, you will be able to do so utilizing margin.

 

[Accipiter]

OK, thanks to a chat with a helpful person, thanks Mike you are a legend, I worked out what is going on.

In my cash account in AUD when paper trading with a balance of AUD 380K, I was charged full price for an ES contract of USD 160k or something similar. It has been explained to me that with a cash account an ES contract has margin built into it and cost USD 14k, or whatever at the moment, and you do not need margin as it is already there. I dumbly assumed that until the full price was charged, thought I was wrong and then went further into confusion.

An appropriate explanation was not provided by anyone here because the situation is hard to get your head around, let alone explain accurately by me.

So the paper account in AUD may not be happy with no USD, or it is not configured for ES.

I would like to paper trade ES in TWS, but I may not be able to and unfortunately my faith in the real trading account is lost as well.

 

[Accipiter]

So in short, if you are looking to trade US futures, assuming you qualify for margin permission, you will be able to do so utilizing margin.

We were having two parallel conversations. The first is that I looked at the wrong section and other than Investment was Margin Portfolio as an account type. I went back and then saw Leveraged Trading as an option. Leveraged Trading is what you are talking about, and you are correct in your statements.

The issue as I mentioned above is that when I was paper trading ES I was having the full $ 160k taken out of my balance. I sold and then when trying to buy back I got a warning of insufficient funds in my AUD 380K paper account to close the deal. I had this issue with FX in my paper account (see image), where I could get into a trade and not get out due to 'insufficient cash'.

So from my perspective ES was full price unless I had a margin account, which when I checked gave me Margin Portfolio as an option in account types, which the requirements are as stated accurately by me, but also indicated correctly as not necessary by you.

So my entrenched irrational fear is that I get into a trade and can't get out, as it has happened in my paper trading account numerous times with FX and futures. I think it is a AUD and USD cash balance issue, but surely this should be documented somewhere.

So it would have been nice as a rep of IB for you to have taken the time and interest to not just make short contrary statements but said:

"you don't need a margin account for futures you can have a cash account and trade at the listed price of 14K as there is margin already built in to the contracts, if you want a margin account you can apply for a Leveraged Trading account which requires 40K+ per year income only. The 100K you refer to is for Margin Portfolio which is a different type of account in a different account management option".

As for the full price being taken out of the account, we could have moved on to that.