IB margin increase after close of market

O

osho67

Last night at the close my initial margin was about $80539. Today in the morning at about 8.00 a.m. this was increased to $101248. This is an increase of about 26%. As a result my cushion came down from .488 to -345. I know this is something to do with OCC. My question is (1) Why cant IB not programme this into margin software so that changes take place gradually during the trading hours? This was a very drastic change, (2) what can an investor do so that in his a/c margin fluctuations are smooth and orderly? This is very important as sometimes I will be forced to close positions at a loss. I want to manage my risk and please suggest what should I do to safeguard myself from abrupt changes. Thanks. Much appreciate taking time to take this problem into study.

Above is the text I have send to IB. I welcome comments from other readers for suggestions and solution to this problem. Thanks
 
Is this a portfolio margin account or Reg-T? Is the margin from equity or option positions or both?

1245
 
you need more margin to trade at IB than with most brokers.

This is something you need to take into account if you're a customer with them.
 
Quote from 1245:

Is this a portfolio margin account or Reg-T? Is the margin from equity or option positions or both?

1245 [/QUOT

This is a portfolio margin a/c and all trades are iron condors on SPX
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Quote from traderslair:

you need more margin to trade at IB than with most brokers.

This is something you need to take into account if you're a customer with them.
More...

I can live with IBs margin but to make big change after the markets have closed is really causes much worries. (26% increase is a lot)
 
Quote from osho67:

Quote from 1245:

Is this a portfolio margin account or Reg-T? Is the margin from equity or option positions or both?

1245 [/QUOT

This is a portfolio margin a/c and all trades are iron condors on SPX
More...

I don't know how IB calculates your PM with or without house rules. I can tell you that the OCC does not provide their calculations during the day, only well after the close. If your requirement come from a house rule, the market drop yesterday near the end of the day and can cause vol spikes which might have effected it. What is your margin on their screen right now?

1245
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Quote from osho67:

I can live with IBs margin but to make big change after the markets have closed is really causes much worries. (26% increase is a lot)
More...

This is pure conjecture, but I imagine the reason for the overnight increase is because of a major economic news release pending the next morning. This morning was Non-Farm Payrolls (NFP) and I imagine the margin increase also occurs prior to the FOMC days.

I recommend adjusting your position size prior to these events and keeping them in mind when swinging a position that's highly leveraged.
 
Quote from osho67:

Last night at the close my initial margin was about $80539. Today in the morning at about 8.00 a.m. this was increased to $101248. This is an increase of about 26%. As a result my cushion came down from .488 to -345. I know this is something to do with OCC. My question is (1) Why cant IB not programme this into margin software so that changes take place gradually during the trading hours? This was a very drastic change, (2) what can an investor do so that in his a/c margin fluctuations are smooth and orderly? This is very important as sometimes I will be forced to close positions at a loss. I want to manage my risk and please suggest what should I do to safeguard myself from abrupt changes. Thanks. Much appreciate taking time to take this problem into study.

Above is the text I have send to IB. I welcome comments from other readers for suggestions and solution to this problem. Thanks
More...

why dont you call your rep and ask them about it? it is not hard for them to explain some of the rules/guideliness and then for you to model the whole thing in a spreadsheet and give yourself a cushion just in case... and then compare your spreadsheet model to the end of day/next day to verify accuracy and have peace of mind...
 
Did your margin increase beyond your maximum loss on the spread? I would think that under a PM account an SPX iron condor margin should generally be your maximum loss (unless it is substantially out of the money)
 
IB has a projected look ahead margin calculation. Did this number not show teh increase ahead of time?

Further, IB has a report that shows 'sensitivity' which can also show you your risk level in this repect. (I forgot trh name of teh report.)
 
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