IB and margin reports.

[osho67]

I only have ETFs in my portfolio and all of then have been picked up from the list of weekly options. IB has grouped as follows

Portfolio group

Product group

Class group

Bonds

Except bonds I donot understand what is each classification . Please give some info on this . I looked IB and Google as well but cant find how these groups are decided. -what is included.

Please help. Thanks , much appreciated

 

[def]

Take a look at the info under this linkL

http://www.interactivebrokers.com/en/p.php?f=margin&p=pmar

 

[osho67]

Quote from def:

Take a look at the info under this linkL

http://www.interactivebrokers.com/en/p.php?f=margin&p=pmar

Thanks def. much appreciated.

Will I use margin more efficiently in any particular group. e.g I have selected TNA for trading. How do I know which group it belongs to . Are these clasification universal or IB have made them up?

The idea is I want to be more efficient,

Thanks so much

 

[ids]

These groups are creations of the OCC. We are using their margining technology called TIMS. You can Google OCC TIMS for further information. We modified TIMS to satisfy our own risk criteria. For example, we are using maximum of 15% and 5 standard deviations for stock derivatives as an opposite of simple 15% required by the OCC. We also add to your margin requirements if the portfolio is concentrated in a few underlying stocks or ETF. There are other deviations from the OCC TIMS but it is still TIMS in the core.

 

[osho67]

Quote from ids:

These groups are creations of the OCC. We are using their margining technology called TIMS. You can Google OCC TIMS for further information. We modified TIMS to satisfy our own risk criteria. For example, we are using maximum of 15% and 5 standard deviations for stock derivatives as an opposite of simple 15% required by the OCC. We also add to your margin requirements if the portfolio is concentrated in a few underlying stocks or ETF. There are other deviations from the OCC TIMS but it is still TIMS in the core.

Thanks , much appreciated.

I only use ETFs and sell options on them. Can I assume that it will be 15% all round except concentrations. (portfolio a/c) thanks for your time.

 

[ids]

ETF is max(15%, 5 standard deviations). It is less for broad-based indices (SPY, QQQQ, etc.)

 

[BobG]

Quote from ids:

We also add to your margin requirements if the portfolio is concentrated in a few underlying stocks or ETF.

Do you guys have a description somewhere of the test that you use to determine whether a portfolio is concentrated? I assume it's some kind of objective test, but i couldn't find a description on your website.

Also, do you have a description of the adjustment to margin amount?

 

[ids]

We do not have a simple concentration test. It is all coming to crunching of a lot of numbers. Roughly speaking, if you have 6 or more groups with about equal margins, concentration should no be your concern.

What is the adjustment to margin amount?

 

[BobG]

Quote from ids:

We do not have a simple concentration test. It is all coming to crunching of a lot of numbers. Roughly speaking, if you have 6 or more groups with about equal margins, concentration should no be your concern.

Why is it so difficult to find out the actual test? For most of your calculations IB assume its customers are intelligent enought to understand formulas, but for this one we aren't?

Quote from ids:

What is the adjustment to margin amount? [/B]

I was responding to your comment:

Quote from ids:
We also add to your margin requirements if the portfolio is concentrated [/B]

How much?

 

[ids]

It is not just set of formulas. It is a large amount of pre-calculated numbers such as covariant values.