Your representative basically confirms what Iâve so far found.
It appears the algorithm (simple calculation) is indeed quite simple. Unless provided with a maximum negative equity number, upon -30/+30% underlying/account loss in which the fee wouldnât apply, it will be charged should this number be anything greater than $1.
If so, I have to say, itâs actually not hard to do this, and more importantly, itâs not taking excessive risk putting other clients or IB at liability.
I can see why they mention deep OTM short options as one of the probable issues; itâs probably the easiest way to create this scenario in your account. However, would this not be better solved by vastly increasing the short option minimum, well beyond exchange minimums?
We already know when volatility soars on any specific futures underlying margins are increased, and in more dramatic action, if it had 50% day margins those could be temporarily suspended too.
I just think there could have been a better way to address this, obviously biased, since this does apply to my account and it seems (though still looking) that I canât go âno feeâ without taking a small loss, or purposely reducing future potential profits (though I believe by a small amount).
Then again, maybe I eat the fee and continue on, which brings to question â Is this fee tax deductible, and if so applied automatically to my IB-generated T5008 (Canadian) slip? Please say yes.
