IB intraday margin requirements changed.

Quote from notouch:

You need to learn to relax old man. It's possible that an intraday spike could take out a swing position that would not have been liquidated if the old margin requirements were in place.

I agree with the poster saying it looks like they acted in haste. Why suddenly make the decision this Monday morning when the volatility has been with us for 2 weeks? A week's notice would have given IB clients the opportunity to deposit more money in their trading accounts if necessary. It says a lot for the mentality of those who run IB that they just drop this decision on their customers on a Monday morning.
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I'm completely relaxed. LOL. I just don't have alot of tolerance for your kind of stupidity.

Let me give you an example: overnight margin requires $3500 initial margin on the ES, $2800 maintenance. So to put a new swing trade position on in the ES you would need MORE than the new intraday margin requires. In other words, there is no situation I can think of where anything taking place in the market intraday would change what would have already happened to the overnight trader under the OLD rules. The new intraday rules have no bearing on the overnight trader UNLESS he is also trading intraday.

Why don't you go read the margin rules before making further posts.

OldTrader

EDIT: By the way, what kind of hand wringing is it going to cause when the exchange suddenly comes out and changes the margin requirements without notice? This happens routinely in the futures markets. That WILL affect overnight traders.
 
Quote from OldTrader:

I'm completely relaxed. LOL. I just don't have alot of tolerance for your kind of stupidity.

Let me give you an example: overnight margin requires $3500 initial margin on the ES, $2800 maintenance. So to put a new swing trade position on in the ES you would need MORE than the new intraday margin requires. In other words, there is no situation I can think of where anything taking place in the market intraday would change what would have already happened to the overnight trader under the OLD rules. The new intraday rules have no bearing on the overnight trader UNLESS he is also trading intraday.

Why don't you go read the margin rules before making further posts.

OldTrader

EDIT: By the way, what kind of hand wringing is it going to cause when the exchange suddenly comes out and changes the margin requirements without notice? This happens routinely in the futures markets. That WILL affect overnight traders.
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I'm a more tolerant man than you. I will tolerate your stupidity and explain it to you.

It is possible that price could spike dramatically intraday and force a liquidation of an IB client's position. The price could then stabilise and finish the day in what would have been a profitable position for the IB client. If the old margin requirements had been in place the client's position could have survived the spike. With the new margin requirements in place the position could have been liquidated.

Please think before you post again to avoid making yourself look like a senile and grumpy old geriatric.
 
In addition - WELCOME to the wonderful world of IB.

They did this before with option DT rules and again with another rule change that I can't even remember.

With the option rule change they added DT rules to equity options without even informing clients.

Option DT rules affected only small accounts - those people were howling because they ran out of DTs and had only closings as trades.

I would think that a 100 lot trader would want to lower size in this riskier, volatile market.
 
Old Trader,

I realized I had always just assumed, like you I'm guessing, that an overnight hold had to have maintenance margin at all times, ie that the position couldn't be covered by intraday margin during the day. Could be this rude little twerp is right about that, although I agree with you it would be madness to trade that way. Any IB customers who do should thank IB for removing the loaded pistol from their hands.

The vast majority of those trading the ES have never experienced a trading halt in that market. Halts used to be fairly routine affairs. There is nothing like a market limit lock down to impress upon one the value of conservative margining. One halt and all the whining about how unfair IB is will stop, I predict.
 
Quote from AAAintheBeltway:

Old Trader,

I realized I had always just assumed, like you I'm guessing, that an overnight hold had to have maintenance margin at all times, ie that the position couldn't be covered by intraday margin during the day. Could be this rude little twerp is right about that, although I agree with you it would be madness to trade that way. Any IB customers who do should thank IB for removing the loaded pistol from their hands.

The vast majority of those trading the ES have never experienced a trading halt in that market. Halts used to be fairly routine affairs. There is nothing like a market limit lock down to impress upon one the value of conservative margining. One halt and all the whining about how unfair IB is will stop, I predict.
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AAA:

An overnight hold does have to have maintenance margin. But the way IB handles it is that during the day your account reverts to day trade margins.

If you're an overnight trader you would need $3500 initial margin, but as you put the trade on IB is only going to require the day trade margin until 3:45 EST, when the overnight margins kick in. So if your plan was to do an overnight trade, I'm assuming you would have had at least $3500 in your account. As the overnight margins kick in, you have to maintain $2800 equity. The next day, the day trade margin kicks in, which is now $2800.

So again, I can't think of any circumstance intraday that would affect the overnight traders position as a result of the new intraday rules, provided that he had $3500 to start with and provided the trader didn't do any daytrading in addition to his existing overnight position.

OldTrader
 
Quote from petteri:

I wonder when overnight margin requiments will be adjusted as well?



-----------------------------------------------

To CFE,ECBOT,GLOBEX traders:
Mon Aug 6 09:14:14 2007 EST

IMPORTANT MARGIN NOTICE

Effective Monday 6 August, 2007, and until further notice, there will be a
significant change in the intraday margins for most stock and index futures
and futures options. Specifically, the intraday margin will be set to cover
a price move of 4% in the instrument, but will not exceed the regular
maintenance margin. By example, a 4% move in the ES futures would require
intraday margin of 4% * 1450 price * 50 multiplier = 2900 USD. The regular
intraday margin is 1400 USD and the regular overnight maintenance margin is
2800 USD so for ES the intraday margin would be the same as the overnight.
PLEASE NOTE THAT THE ONLY MARGINS AFFECTED BY THIS POLICY CHANGE ARE
INTRADAY (REDUCED) MARGINS ON EQUITY-LINKED FUTURES AND FUTURES OPTIONS.

Please note that many of the statutory margin requirements for many US index
futures and options imply a very small intraday margin requirement (in the
case of ES, less than 2%). In light of the recent volatility in the markets,
we feel it is prudent to apply margins that are consistent with this
volatility.
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So looks like the YM is moving up to the 2250 area now; quite a big difference from the 1125
 
Quote from chewbacca:

their move probably marks the short term top in volitility.
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Thats funny I was thinking the same thing, exchanges and brokerages are usually late in making those kind of adjustments.
 
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