IB Margin change
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Originally posted by ANCHOR:
What your describing is something like this, I want to start trading with Bright Trading. I need a initial deposit amount of $25,000.00. Fine, I am then allowed to go and lose the entire amount.
That is not correct. If you are, or have been a Bright trader, you should look at the operating agreement more carefully. You do not want to fall below $15K as I recall.
$2K is (and has been for decades) the minimum margin requirement for stocks in a non-PDT account. $25K is essentially the minimum initial margin in a PDT account if you want to be able to daytrade. Many brokers have had $5K, $10K, and $15K requirements for years.
$2K does not seem at all an unreasonable requirement for a futures account. That's only 100 NQ points. I saw a 30 point range in the NQ in just 3 8-minute bars after the Fed today.
If you're trading with less than that, you will either quickly have more than that because you're good, or go broke because you aren't. It's the dirty little secret of the brokerage biz, and one of the factors that prompted the $25K PDT minimum. At least with IB, you've got a fighting chance with a $5K account without losing it all in commissions like so many people (including me) did at the ticket shops of the 90s.
Having said all that, I think it's entirely possible that there are ambiguities in the regs that suggest a minimum of $2K may be required at some point in the near future. Perhaps IB is just choosing to take the hit now instead of letting a bunch of people sign up, lose their money, and then telling them they can't trade any more. This way, they'll know from the start that if they can't afford to pony up some more money if they get stuck, they might not be able to dig out (i.e. get even). That may cause people to act more prudently, which is good for all participants.
What your describing is something like this, I want to start trading with Bright Trading. I need a initial deposit amount of $25,000.00. Fine, I am then allowed to go and lose the entire amount.
That is not correct. If you are, or have been a Bright trader, you should look at the operating agreement more carefully. You do not want to fall below $15K as I recall.
$2K is (and has been for decades) the minimum margin requirement for stocks in a non-PDT account. $25K is essentially the minimum initial margin in a PDT account if you want to be able to daytrade. Many brokers have had $5K, $10K, and $15K requirements for years.
$2K does not seem at all an unreasonable requirement for a futures account. That's only 100 NQ points. I saw a 30 point range in the NQ in just 3 8-minute bars after the Fed today.
If you're trading with less than that, you will either quickly have more than that because you're good, or go broke because you aren't. It's the dirty little secret of the brokerage biz, and one of the factors that prompted the $25K PDT minimum. At least with IB, you've got a fighting chance with a $5K account without losing it all in commissions like so many people (including me) did at the ticket shops of the 90s.
Having said all that, I think it's entirely possible that there are ambiguities in the regs that suggest a minimum of $2K may be required at some point in the near future. Perhaps IB is just choosing to take the hit now instead of letting a bunch of people sign up, lose their money, and then telling them they can't trade any more. This way, they'll know from the start that if they can't afford to pony up some more money if they get stuck, they might not be able to dig out (i.e. get even). That may cause people to act more prudently, which is good for all participants.
Def your first comment here makes no sense. Why would it be confusing to have different margin requirements for the 80 different ssf's? Every futures contract traded has different margin requirements. Index, Agricultural, Currency, ect......... Why would it be hard for the stocks to be different?
A CSCO??? 1300 dollars in a account would cover the whole contract on a 100% move! MSFT and IBM are different but again no reason not to have different margin requirements.
Your second comment is what traders have come to expect from ib. Crappy, crappy service.
1. "Ib isn't a newbie playground" MY A$$!!! You spend all day on ET advertising to newbies.
2. "The cost of maintaining such accounts is higher" DOUBTFUL!!! Most under funded newbies trade their a$$ off and always over trade.
3. "People with small accounts want to have good customer service and be able to load stock symbols" BROTHER!!! What do they think ib is a brokerage firm? You mean they want ib to do their job, come on that's not fair.
Man Def your right, under funded newbies just aren't worth a SH!T to ib. Why should a broker who advertises to newbie traders on chat forms have to deal with such newbie crap? I guess newbies should just send you a 2k check so you can take it out back and burn it to keep your A$$ warm!
def
Sponsor
LOL...
I'll agree you have some valid points and others that are totally wrong and others that are disrespectful. Thus I won't address all of them. I must first say, please don't send me check. I don't need your cash and it's plenty warm in Hong Kong.
Margin: you're right, I'm wrong. With Span it is a simple matter. However this isn't an initial margin issue. It is about having an ample buffer in an account. Sure the odds of a stock under $15 shooting up 100% are remote. Nevertheless, it can and has happened (takeovers for example).
Newbies trading their butts off: Perhaps this is true. If so, doesn't it imply that the firm doesn't encourage overtrading in an underfunded account?
Targetting newbies? Didn't realize that this forum only had newbies. I'll also state for the record: "I believe if you can't put up 2K - you shouldn't be actively trading futures".
Auto-liq: Probably right. The large accounts don't lose sleep over the small accounts going bust. I brought this up as someone mentioned what another firm does. The point is policy is policy and they take comfort that there are no exceptions. Otherwise, where do you draw the line? Should we just write off accounts that go into negative territory? If so, guess who ends up subsidizing it.
I'll agree you have some valid points and others that are totally wrong and others that are disrespectful. Thus I won't address all of them. I must first say, please don't send me check. I don't need your cash and it's plenty warm in Hong Kong.
Margin: you're right, I'm wrong. With Span it is a simple matter. However this isn't an initial margin issue. It is about having an ample buffer in an account. Sure the odds of a stock under $15 shooting up 100% are remote. Nevertheless, it can and has happened (takeovers for example).
Newbies trading their butts off: Perhaps this is true. If so, doesn't it imply that the firm doesn't encourage overtrading in an underfunded account?
Targetting newbies? Didn't realize that this forum only had newbies. I'll also state for the record: "I believe if you can't put up 2K - you shouldn't be actively trading futures".
Auto-liq: Probably right. The large accounts don't lose sleep over the small accounts going bust. I brought this up as someone mentioned what another firm does. The point is policy is policy and they take comfort that there are no exceptions. Otherwise, where do you draw the line? Should we just write off accounts that go into negative territory? If so, guess who ends up subsidizing it.
Money never sleeps hey Def?
I still say that what Ib has done is just flat out lazy. Do you know that there are 30 ssf's on stocks that are under 20 bucks? Anyone with 1300-1600 dollar account could easily manage one of these contracts with very little chance of blowing out an account from one or two trades. Someone with 1500 bucks could still trade 100 shares of Cisco with out having to use 90% of his account. It would be closer to 15-20% which is very reasonable. What about the trader who started this thread? He was trading mini gold and silver contracts. What is the margin amount there? 150 bucks.
I'm not talking about NQ or ES contracts. If you have less then 2k those may be hard to trade. But what about ssf's? What about the guy trading mini gold? How can Ib just say if you have less then 2k you can not trade ANY future or ANY future option? That is just lazy. It's not good for traders or trading. There is no thought what so ever behind a rule like that. Much like the PDT. You can rationalize something that is irrational.
Ib could have just laid out some decent futures rules for small accounts. Like...
1. Only a certain few of the ssf's could be traded. The ones under 20 bucks or something.
2. Only one ssf position at a time.
3. If you want to trade mini gold, go ahead!
Make the 2k and up on stuff like IBM futures, NQ, ES, ect.... Stuff that could land a small trader a very large loss or put the firm in trouble. But no, Ib just gets lazy. Under 2k no futures. Why? We don't feel like taking the time to make some decent rules for futures trading. That's sad.
I still say that what Ib has done is just flat out lazy. Do you know that there are 30 ssf's on stocks that are under 20 bucks? Anyone with 1300-1600 dollar account could easily manage one of these contracts with very little chance of blowing out an account from one or two trades. Someone with 1500 bucks could still trade 100 shares of Cisco with out having to use 90% of his account. It would be closer to 15-20% which is very reasonable. What about the trader who started this thread? He was trading mini gold and silver contracts. What is the margin amount there? 150 bucks.
I'm not talking about NQ or ES contracts. If you have less then 2k those may be hard to trade. But what about ssf's? What about the guy trading mini gold? How can Ib just say if you have less then 2k you can not trade ANY future or ANY future option? That is just lazy. It's not good for traders or trading. There is no thought what so ever behind a rule like that. Much like the PDT. You can rationalize something that is irrational.
Ib could have just laid out some decent futures rules for small accounts. Like...
1. Only a certain few of the ssf's could be traded. The ones under 20 bucks or something.
2. Only one ssf position at a time.
3. If you want to trade mini gold, go ahead!
Make the 2k and up on stuff like IBM futures, NQ, ES, ect.... Stuff that could land a small trader a very large loss or put the firm in trouble. But no, Ib just gets lazy. Under 2k no futures. Why? We don't feel like taking the time to make some decent rules for futures trading. That's sad.
Lets pick at some stuff here....
Why does the firm care if newbies trade their butts off? That's how newbies learn.
Just because you have less then 2k you should not trade futures. Why? Maybe not ES but what about mini gold? Maintenance margin of 100 bucks. I know guys who have become very successful starting out this way. Just getting a feel for trading.
You and Ib are just to focused on NQ and ES. Give the people who what to trade small sff's like SUNW and mini gold the ability to do it. What is wrong with that???
def
Sponsor
I still don't think somone should be messing with highly levered instruments if they can only afford a starting stake < 2K.
Curious, why haven't you complained about the similar policy that has ALWAYS been in place for equities?
From the web site:
"All stocks bought or sold on margin require a minimum of $2,000 in equity. Stock bought with cash does not have a minimum equity requirement. "
Curious, why haven't you complained about the similar policy that has ALWAYS been in place for equities?
From the web site:
"All stocks bought or sold on margin require a minimum of $2,000 in equity. Stock bought with cash does not have a minimum equity requirement. "
>>Your second comment is what traders have come to expect >>from ib. Crappy, crappy service.
>>Man Def your right, under funded newbies just aren't worth a >>SH!T to ib. Why should a broker who advertises to newbie >>traders on chat forms have to deal with such newbie crap? I >>guess newbies should just send you a 2k check so you can >>take it out back and burn it to keep your A$$ warm!
>>You're a funny guy Def. Let me ask you something, have you >>always been so brainwashed and ignorant? Or is that >>something Ib teaches it's employee's?
You are an idiot Sharp. A stone-cold, and certainly broke, idiot. Def has to be civil because he is on the job but Iâll give it to you straight.
Why is it that 95% of messages on the ET Direct-Access Broker site relates to IB? Because they are doing something right. Our very presence here is only one more validation of the compelling value of IBâs business model.
But you can only kick and rant ad-infinitum. Pathetic.
You want to whine about poor 'service?' Low commissions are a service. Global, 24hr trading is a service. Multiple products on one platform is a service. Fast execution is a service. Etc. etc. etc. If you want to whine and b**** to a broker who will play wet-nurse to your $2,000 account go somewhere else.
Like so many other things at IB it IS that simple. Go somewhere else.
If I were at IB I'd put a clause in the customer agreement that reads "IB retains the right, at its discretion, to refuse the business of any dumbs*** clients like Sharp" and I'd mail your account balance back to you in a check - pony express.
Good riddance.
>>Man Def your right, under funded newbies just aren't worth a >>SH!T to ib. Why should a broker who advertises to newbie >>traders on chat forms have to deal with such newbie crap? I >>guess newbies should just send you a 2k check so you can >>take it out back and burn it to keep your A$$ warm!
>>You're a funny guy Def. Let me ask you something, have you >>always been so brainwashed and ignorant? Or is that >>something Ib teaches it's employee's?
You are an idiot Sharp. A stone-cold, and certainly broke, idiot. Def has to be civil because he is on the job but Iâll give it to you straight.
Why is it that 95% of messages on the ET Direct-Access Broker site relates to IB? Because they are doing something right. Our very presence here is only one more validation of the compelling value of IBâs business model.
But you can only kick and rant ad-infinitum. Pathetic.
You want to whine about poor 'service?' Low commissions are a service. Global, 24hr trading is a service. Multiple products on one platform is a service. Fast execution is a service. Etc. etc. etc. If you want to whine and b**** to a broker who will play wet-nurse to your $2,000 account go somewhere else.
Like so many other things at IB it IS that simple. Go somewhere else.
If I were at IB I'd put a clause in the customer agreement that reads "IB retains the right, at its discretion, to refuse the business of any dumbs*** clients like Sharp" and I'd mail your account balance back to you in a check - pony express.
Good riddance.
Where else can you buy $45k worth of product with only a 10% down payment? For any other business 2 or 3 thousand start-up capital is nothing! Most businesses require far more than that.
The problem I'm seeing here is that a few people want to trade the futures and dream of making a nice living off a paltry investment. They should be treating this job as what it is - a business - not a get-rich hobby.
Complaining over a $2000 deposit or a $1500 one, etc. Please! Go out and start a brick and morter business and see how far you can go on even 5 grand, and how long it will be until that money comes back in the front door from sales.
The problem I'm seeing here is that a few people want to trade the futures and dream of making a nice living off a paltry investment. They should be treating this job as what it is - a business - not a get-rich hobby.
Complaining over a $2000 deposit or a $1500 one, etc. Please! Go out and start a brick and morter business and see how far you can go on even 5 grand, and how long it will be until that money comes back in the front door from sales.
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