Effective Monday, stocks with market cap under $100M will be non-marginable at IB

Quote from stock777:

What can you say. IB can see how its customers are positioned.

If too many are exposed to stocks that could go to near zero in a hurry, then it does not make sense to expose the firm to losses by margin addicts.

Take your high risk trades to Ameritrade or someone else that doesn't care.

You have to remember that IB is still mostly a PRIVATE firm, so it's the mans money, not some faceless stockholder.

TP is not Dick 'The Dick' Fuld
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Well said. As a customer, I applaud IB's actions and feel more comfortable with them than anybody.
 
Quote from Toonces:

So if I want to short a stock with a market cap under $100M, I have to have the full amount in my account?
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I actually think the markets would be a lot better off without margin.
 
I think this is significant. In the past (changing margin requirements) almost seems as a precursor to the market going down, maybe not tomorrow or the next day but putting boards on the windows for a storm.
 
Quote from stock777:

I actually think the markets would be a lot better off without margin.
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Sure if you have what others don't it make sense to deny other access to the tool they could be using to compensate for having less of what you want to be useing with no competition at all rather than more competition.

Its like building a wall.

If you have 100000 lemons losing 50000 is a big deal.

If you have 10 lemons risking 5 is not a big deal if you make 1 lemon a month. If you win you get to have 100 soon.

What your suggesting is the removeal of comparative advantage.

Tick tack, Tick tack, Tick tack, Tick tack, Tick tack, Revolution :)
 
Quote from REIT Master:

Well said. As a customer, I applaud IB's actions and feel more comfortable with them than anybody.
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I agree! One day, there will be a major catastrophe, and a host of little brokers and FCMs will have a lot of bankrupt customers, and thus go belly up themselves.

$300 day margins for emini contracts? Isn't it the kind of thing that led top to this $600 trillion leveraged world we now face? Sheesh.

Then, the whiners who have their funds wrapped up for 6 months or even lost in a banktupt broker may suddenly WISH they were IB customers.

Don't they say - it is more important to preserve your trading capital than anything else?
 
This seems like a conservative risk management play.

Sucks if you trade those stocks but I'm sure IB had their reasons. I got a letter the other day informing me that a broker I'd used as recently as January has gone bankrupt. Good thing I moved to IB...
 
this sucks. IB did not think about this very much.

A. the database IB has is wrong - i got a list from them with a stock that has $500m market cap as of friday.

B. these stocks are usually long term buy and hold - kind of venture capital. for things like that you need to have stable financing, i.e. margin. bid/offers are wide - it is difficult to liquidate (and especially now). to change the rules over the weeken is a bit ridiculous.

C. juniors took huge beeting recently - much more than the overal market. many companies that are solid now go under $100m cap.

D. if this screw up then why to decide by market cap? wouldn't free cash flow or stock liquidity be better?
 
Quote from REIT Master:Well said. As a customer, I applaud IB's actions and feel more comfortable with them than anybody.
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I couldn't agree more. The more guys running risky strategies relying on leverage leave IB, the better I sleep.
 
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