Current Margin doubles after switching form Cash to Reg T Margin?

I

iPittyTheFool

Just this week I switched my account from an ordinary cash account to a Reg T Margin account.

Until now the current margin was about as high as the equivalent value of my cash secured puts. All of my short puts sum up to a stock value of 9,565 USD. The current margin was just a couple of USDs below that. Absolutely normal for a cash account.

Yesterday however, when my account switched to Reg T Margin, I was a bit confused to see my margin statements:

My current margin is now 17,864 USD (intitial) and 17,689 USD (maintenance). I expected the margin to go down to about 30%, which would sum up to about 3,000 USD in my case. Instead it almost doubled.

When I set up a new trade, the margin is only about 25-30% (as expected).

So where do these high numbers for my current margin come from?
 
iPittyTheFool said:
Just this week I switched my account from an ordinary cash account to a Reg T Margin account.

Until now the current margin was about as high as the equivalent value of my cash secured puts. All of my short puts sum up to a stock value of 9,565 USD. The current margin was just a couple of USDs below that. Absolutely normal for a cash account.
More...


I always thought that in a Cash Account you couldn't trade options or stocks on margin.
 
if you have a csa its only the net change so the'maintenance bit' aka nothing. they don't take the maximum amount you could ever lose and then more on top. mental charlie
 
iPittyTheFool said:
Just this week I switched my account from an ordinary cash account to a Reg T Margin account.

Until now the current margin was about as high as the equivalent value of my cash secured puts. All of my short puts sum up to a stock value of 9,565 USD. The current margin was just a couple of USDs below that. Absolutely normal for a cash account.

Yesterday however, when my account switched to Reg T Margin, I was a bit confused to see my margin statements:

My current margin is now 17,864 USD (intitial) and 17,689 USD (maintenance). I expected the margin to go down to about 30%, which would sum up to about 3,000 USD in my case. Instead it almost doubled.

When I set up a new trade, the margin is only about 25-30% (as expected).

So where do these high numbers for my current margin come from?
More...


You switched from cash account (meaning you must have the cash dollar for dollar, you are extended no credit) to a margin account... so now you have ability to access margin if you choose to, which basically doubled your buying power, but I believe it's up to the broker discretion and it can be less than that.
 
All right, now this is really strange. I just found a Margin Report in the reports section in the account management. Turns out not just my short put positions have a margin, but also all my long positions have a margin requirement!?

Example:
I own 60 shares of BABA with a value of 12,522 USD. The margin report tells me I need
3,130.50 USD (25.00 %) to maintain this position?

What is going on here?
 
I asked IB for advice and this is what they answered:
"The ~17k margin requirement is for the entire account. Your equities carry a margin requirement as well, even if fully paid for, as that is what dictates the available funds/excess liquidity figures for the account."

Is that really normal? Also fully paid long positions require a margin?
 
You should educate yourself a bit. Search "fully paid long positions require a margin?" in Google and read.
 
You must log in or register to reply here.
Back
Top