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Confused by IB's overnight Reg T margin requirement (Equities)
- Thread starter eugenie98
- Start date
Quote from vikana:
My understanding is that IB checks regT against your entire portfolio at 3:50.
If you're not within 2x net liquidation at that point, they'll close out enough of your trades until you are.
Same throughout the day; if you exceed 4x, you'll get liquidated until under.
I don't trade stocks on margin these days. And I really don't know how IB applies the margin rules.
But, I would say this: There should be more to IB's calculation than what you state here. The reason is that if I buy stock today, and by the close it is where I bought it, then I am within the initial IB guidelines. However, the next day, assuming the stock falls, according to what you have posted here IB would liquidate stock. This should not happen unless the account falls under 30% equity (if that is the maintenance margin amount).
So the point is, if IB checks RegT against the portfolio at 3:50, it should be obvious that initial margin is not applicable every day (that is strictly speaking what RegT is....initial margin). After the initial purchase date, IB should be checking to see whether the account is under maintenance. Maintenance margin is not RegT.
OldTrader
eugenie98, try IB's webinar on TWS Real-time Activity Monitoring... theres a recorded one that you can view right now, and a live webinar coming up this month where I think you can talk to the presenter.
The answer from support is basically: Equity has to remain above 50% for the equity position through 3:50 PM, at 3:50 PM the SMA account is checked to see if its >0, the SMA will not change for the equity transaction after the transaction day if one is holding the position, but 25% maintenance has to be met (always).
So if one meets RegT at 2:30 PM and does not meet RegT at 3:50 PM, positions will be liquidated. After 3:50 PM for the following days, holding that position, equity can drop to 25% without further action.
So if one meets RegT at 2:30 PM and does not meet RegT at 3:50 PM, positions will be liquidated. After 3:50 PM for the following days, holding that position, equity can drop to 25% without further action.