Day-trading margin question
- Thread starter Grater trader
- Start date
They will liquidate intraday, but there are lots of buffers you have to blow through before that happens with a PM account. Roughly speaking they make you hold 10% extra margin over your requirement maintenance, so if you're "maxed out" you can lose 10% of your equity and you just can't do more trading but nothing bad happens. If you lose the next 10%, you've got until near the end of the day to fix it. If you lose more than 20%, well, maybe you should be taking your risk down and they'll do it if you don't do it first.
I do not believe that MoreLeverage is accurately describing IB's liquidation policy as it relates to PM.
Traders should not expect a 20% buffer before liquidation commences.
An IB employee should clear this up, so that the new customer does not get a false sense of security.
See here, especially towards the end of the thread:
http://www.elitetrader.com/et/index...er-margin-requirements-today-10-16-15.295143/
IB recently set initial margin requirements at 1.1x maintenance for PM so that's a 10% buffer, or if you prefer not letting you use the last 10% of your buying power. There's an intraday soft margin buffer of 10% as well, when you're below your maintenance requirement.
http://www.elitetrader.com/et/index...er-margin-requirements-today-10-16-15.295143/
IB recently set initial margin requirements at 1.1x maintenance for PM so that's a 10% buffer, or if you prefer not letting you use the last 10% of your buying power. There's an intraday soft margin buffer of 10% as well, when you're below your maintenance requirement.
Yes, you only need to meet the maintenance requirement. Because they set the initial maintenance requirement to be higher than maintenance, there's already a buffer for the market move against you before there's a potential liquidation.
td is very lax with margin
let's say with IB, if you don't meet the margin requirement by 3:50 you get auto liquidated by their algo but with TD you can hold your position for days sometimes
i've held 4x daytrading margin positions for up to 4 days (without closing the position) with TD without them liquidating, it's pretty incredible....you still get a margin call, but they don't liquidate you
ps this only works with stocks, haven't tested derivatives on td
let's say with IB, if you don't meet the margin requirement by 3:50 you get auto liquidated by their algo but with TD you can hold your position for days sometimes
i've held 4x daytrading margin positions for up to 4 days (without closing the position) with TD without them liquidating, it's pretty incredible....you still get a margin call, but they don't liquidate you
ps this only works with stocks, haven't tested derivatives on td
Such as an Option Debt Spread?
You buy an OTM Debt Spread which goes ITM. To close the trade you have to buy back the short leg first, but all your funds are tied up in the long leg - so you have to call the broker to close it for you.
