Bye-bye reg T

[yip1997]

How did you know IB change the span margin requirement?

The span margin requirement seems to be same for me. The margin req will increase when the spot moves against you, and when IV goes up.

One question for pm and span. When you change margin to pm, does it apply to future options too? IOW, will they still use span for future and future options?

 

[blackjack007]

why are you surprised? they've changed margin req with little or no notice many times already. by my count this would be the 7th time this year.

it's one of many reasons why i now trade with another broker. you just know their policies one day will screw you over. i decided to not give them a chance to screw me over

 

[def]

Quote from blackjack007:

why are you surprised? they've changed margin req with little or no notice many times already. by my count this would be the 7th time this year.

it's one of many reasons why i now trade with another broker. you just know their policies one day will screw you over. i decided to not give them a chance to screw me over

Last I heard is that SPAN margin levels are determined by the exchanges and clearing houses. It shouldn't be a surprise that those levels have risen in this market environment.

 

[just21]

13 November 2007
Change in Margin for Short Out-of-the-Money Equity Index Future Options

Please be advised that per IB's plan to more accurately reflect the risk of short out-of-the-money equity index future options, the margin requirements on these products are being incrementally increased. An increase in the weighting factor, from 11.5% to 12.5%, is scheduled for today, 11-13-2007, and will be implemented starting at 1:00PM EST.

To evaluate the potential impact on your commodity margin requirement, take the total (-30%) P/L value from the most recent Stress Test Summary (available in Account Management / Report Management)and multiply it by the weighting factor (in this case 12.5%). This will approximate the new overnight commodity margin requirement. Note - if the SPAN margin requirement is greater, then SPAN will be used.

Please manage your risk accordingly



Interactive Brokers Customer Service

 

[yip1997]

They are going to increase another 50% in the future.

 

[stock_trad3r]

Reg T needs to go

 

[just21]

Quote from stock_trad3r:

Reg T needs to go

It has gone if you have more than $100,000 in your account. Obviously you have not.

 

[benysl]

Quote from blackjack007:

why are you surprised? they've changed margin req with little or no notice many times already. by my count this would be the 7th time this year.

it's one of many reasons why i now trade with another broker. you just know their policies one day will screw you over. i decided to not give them a chance to screw me over

7th time this year? It is not too bad actually.

By my count it is 8th time from 4th of nov to 14th of nov 2007. This is ridiculous. A options seller will normally sell 30 - 60 days like myself. This sudden suprise increase upset a lot of people including me of course.

Nobody know when the next 8 times will occur. And of course IB will not increase as and when they like and they will only do it when market is volatile and bla bla bla.

My account with IB over 3 years will put to an end when my options expire. Good luck everyone else.

 

[Maverick74]

Silly question. But why are you guys maxing out your leverage anyway? The only way this can be an issue for you is if you are maxing out your leverage so that any sudden increase in margin levels forces a margin call. Anyway, just join a JBO if it's really that big of an issue.

 

[yip1997]

Too bad that you can't join JBO with your IRA money.