Futures margins

[younggotti]

Hi
I cannot understand how IBKR treats futures margins.

Right now, even though I have a few open contracts, the "future" column in the "cash report" section of my activity statement is blank and my cash is 100% on the "securities" portion of the account. Therefore, it seems that futures margins are only used to assess portfolio risk (just like stocks or ETFs margins) and don't affect the amount of cash I actually have and the interests my account is charged with.

On the other hand, I recall that during the covid crisis, interest was charged in AUD, after IBKR significantly increased the margins on XT contracts. If I look at the March 2020 cash report, I see that cash was internally transferred from the "securities" account to the futures account.
Why are they behaving differently now than they did then?
Thanks

 

[HobbyTrading]

IB does not take the margin requirement out of your cash position. That's why you don't see a change in your cash position(s). Instead, IB takes care of the margin and considers this a loan to you. Therefore they charge you interest for it.

 

[mervyn]

Hi

Right now, even though I have a few open contracts, the "future" column in the "cash report" section of my activity statement is blank and my cash is 100% on the "securities" portion of the account. Therefore, it seems that futures margins are only used to assess portfolio risk (just like stocks or ETFs margins) and don't affect the amount of cash I actually have and the interests my account is charged with.

I don't get what you are saying, IB internal transfer cash from "Securities" to "Futures", and auto-sweep by default any excess or shortfall after MTM is calculated. If you have open futures contracts, you should have "futures" value, and MTM debit/credit amount daily.

margins required to post for entering a trade is treated a "loan", it reduces your buying power and excess overnight liquidity.

 

[younggotti]

IB does not take the margin requirement out of your cash position. That's why you don't see a change in your cash position(s). Instead, IB takes care of the margin and considers this a loan to you. Therefore they charge you interest for it.

How is this loan represented in the statements? I can't see anything related. If by "loan" you mean internally transferring cash from the securities to the futures account, as I said in my previous post IB did it in March 2020 but not right now (cash balance in my futures account is zero).

Also, the interest I see as charged in my activity statements are based on the cash balance of my securities account. I see no interest linked to my futures positions.

BTW, if I understand correctly, even if there were internal transfers to the futures account, IB wouldn't charge interest, as long as the overall cash balance is positive.
See exemple 3 here, where a positive balance on the futures account reduces the overall negative cash balance:
https://www.interactivebrokers.eu/it/?f=5425

 

[mervyn]

BTW, if I understand correctly, even if there were internal transfers to the futures account, IB wouldn't charge interest, as long as the overall cash balance is positive.

That is correct. If you buy futures contracts out of your total cash, only change is that your buying power is reduced by the amount of the futures margin as cost. If you hold futures positions overnight, there is MTM amount, either credit or debit, on futures balance.

 

[younggotti]

IB internal transfer cash from "Securities" to "Futures"

That's what happened in March 2020, but not right now. This is yesterday's activity statement (several futures positions were open).

To be precise, my futures account didn't have any movements during the whole 2021, even with several futures transactions.

auto-sweep by default any excess or shortfall after MTM is calculated. If you have open futures contracts, you should have "futures" value, and MTM debit/credit amount daily.

I recall having enabled auto-sweep in the past but right now I can't even find the option in the account settings. From what I read here, auto-sweep is not available for IB-UKL (I'm with IB-IE , maybe it's not available with them as well).
https://www.interactivebrokers.com/en/software/am/am/manageaccount/excessfundssweep.htm

As for MTM, in my statements I find it debited/credited in my securities account.

 

[mervyn]

That's what happened in March 2020, but not right now. This is yesterday's activity statement (several futures positions were open).

To be precise, my futures account didn't have any movements during the whole 2021, even with several futures transactions.

This doesn't seem you have any futures contracts. If you don't have any activities last year, could be your positions were expired?

 

[younggotti]

This doesn't seem you have any futures contracts. If you don't have any activities last year, could be your positions were expired?

I have open positions in the following futures: XTH2, CGBH22, FGBL MAR 22, FSXE MAR 22.
In 2021 I traded over 20 contracts but the futures account never saw a movement.

Looks like the futures account is never used with IB-IE: MtM is credited/debited on securities account and cash never moves from there. Maybe @def can confirm.