IB and incremental increase in Margins

[FT79]

Quote from yip1997:

If you are doing it gradually with a plan, why can't you give us the schedule how you will change the weighting factor in the future? Do you have a plan? We need the schedule so we can monitor our leverage properly.

I have received an e-mail from IB how the increase effects my portfolio. You can also download a Stress Test report via account management (under Report Management)

 

[yip1997]

Quote from ids:

This is a minimum. The maximum is probably 25%.

It was 12.5% yesterday, and will go up to 25%. It is a 100% increase in margin. After this change, will pm provide a higher leverage?

 

[Xenia]

15 November 2007

Change in Margin for Short Out-of-the-Money Equity Index Future Options

Please be advised that per IB's plan to more accurately reflect the risk of short out-of-the-money equity index future options, the margin requirements on these products are being incrementally increased. An increase in the weighting factor, from 13.5% to 14.5%, is scheduled for today, 11-15-2007, and will be implemented starting at 10:30AM EST.

To evaluate the potential impact on your commodity margin requirement, take the total (-30%) P/L value from the most recent Stress Test Summary (available in Account Management / Report Management)and multiply it by the weighting factor (in this case 14.5%). This will approximate the new overnight commodity margin requirement. Note - if the SPAN margin requirement is greater, then SPAN will be used. Please manage your risk accordingly

Interactive Brokers Customer Service

 

[ids]

PM margin on short out of money options will be very close to margin on compatible futures options. It is exactly where we are going.

 

[gkishot]

Quote from ids:

PM margin on short out of money options will be very close to margin on compatible futures options. It is exactly where we are going.

Too bad IB does not follow strictly the SPAN margin requirements.

 

[just21]

Guess IB think there is going to a bear market!

 

[yip1997]

Quote from Xenia:

15 November 2007

Change in Margin for Short Out-of-the-Money Equity Index Future Options

Please be advised that per IB's plan to more accurately reflect the risk of short out-of-the-money equity index future options, the margin requirements on these products are being incrementally increased. An increase in the weighting factor, from 13.5% to 14.5%, is scheduled for today, 11-15-2007, and will be implemented starting at 10:30AM EST.

To evaluate the potential impact on your commodity margin requirement, take the total (-30%) P/L value from the most recent Stress Test Summary (available in Account Management / Report Management)and multiply it by the weighting factor (in this case 14.5%). This will approximate the new overnight commodity margin requirement. Note - if the SPAN margin requirement is greater, then SPAN will be used. Please manage your risk accordingly

Interactive Brokers Customer Service

IB will increase the weighting factor by 1% everyday till it reaches 25%. No points of trading future options anymore.

 

[domestic]

Quote from yip1997:

IB will increase the weighting factor by 1% everyday till it reaches 25%. No points of trading future options anymore.

well, maybe no point with ib. only sad to move on since being with them since before 2000. of course i can mitigate margin with spreads and my pm; i just have a bad feeling about this and it is my first negative since i started with them.

 

[mrez114]

I have filled out transfer forms today. After 6 year, I am gone. IB's margin requirements today are twice higher than any of the brokers I queried. They almost killed me in August and I am not waiting for their liquidation software to do this again. At current 14.5% waiting factor it is impossible to trade as it is; with a move to 25% we will better off doing tape watching instead of using any intelligent strategies which take more than a day to work.

Good luck to all of you with plans to keep your account at IB. The train is coming through, so get off the rails while you still can.

 

[just21]

Quote from mrez114:

I have filled out transfer forms today. After 6 year, I am gone. IB's margin requirements today are twice higher than any of the brokers I queried. They almost killed me in August and I am not waiting for their liquidation software to do this again. At current 14.5% waiting factor it is impossible to trade as it is; with a move to 25% we will better off doing tape watching instead of using any intelligent strategies which take more than a day to work.

Good luck to all of you with plans to keep your account at IB. The train is coming through, so get off the rails while you still can.

What broker are you moving to?