I opened TWS this morning to see that my margin requirements increased overnight. I was never near a margin call yesterday. Now my initial margin is greater than my maintenance margin. I am on hold on the phone and online help. Did this happen to anyone else? I am going to have to liquidate a position if I can't figure this out before the open. Anyone else have this happen?
IB Margin Increase
- Thread starter Eldredge
- Start date
Obviously there isn't a lot of interest in this, but if a couple of you could let me know if you're having this problem, I would appreciate it. The help desk says they are working on this. I am now (after market close) showing initial margin requirement of 50% and maintenance margin requirement of about 29%, instead of the normal 25% for both. I am wondering how wide spread this problem is, and how much attention it is getting. Thanks for ANY response.
Ater a 45 minute wait on hold, I was told by IB rep that the margin req. changed today, without notice. It is 4:1 initial and maint from 930AM-350 PM From 350-400 PM the maint and initial are both 2:1 and from 400 PM to 929 AM the initial is 2:1 and maint is 4:1 . I was liquidated in that 10 minute window. Just fucking lovely!! This policy sucks and doing without notification is disgusting!!
I am pretty angry right now, so I am going to keep this brief. This is IB's new margin requirement - which was just posted to their website:
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"Patterned Day Trading" margin requirements are as follows:
Initial
Purchase: maximum (25% * marginable stock value, $25,000) or maximum (100% * non-marginable stock value, $25,000). From 15:50 - 16:00 ET, maximum (50% * marginable stock value, $25,000) or maximum (100% * non-marginable stock value, $25,000) will be applied.
Short sale: if last sale price/share >= $17 then maximum (25% * marginable stock value, $25,000), else if $17 > last sale price/share > $5 then maximum ($5 * marginable shares, $25,000), else if last sale price < = $5 then maximum (maximum (marginable market value, $2.50 * marginable shares), $25,000) or maximum (100% * non-marginable stock value, $25,000). From 15:50 - 16:00 ET, maximum (50% * marginable stock value, $25,000) or maximum (100% * non-marginable stock value, $25,000) will be applied. Short sale proceeds are applied to cash and the short position is subtracted from equity.
In addition for approving new opening orders in stocks, prior night's Equity with Margin Value (as of 16:00 ET) must be >= Account's Total Initial Margin Requirement.* Any opening stock order not meeting this criteria will be rejected.
*Example
A customer desires to purchase XYZ stock for $100. Equity with margin value (EMV) from prior night is $40, and current EMV is $100. Customer currently owns options with an initial margin requirement of $50. The customer would not be allowed to make this stock purchase as the $25 margin requirement (25%*100) for the stock plus the $50 margined requirement for the options is greater than the $40 EMV from the prior night. No liquidation would take place even though the option margin requirement of $50 is greater than last night's EMV of $40. In addition if a customer wanted to add an option position with an initial margin requirement of $40, it would be allowed as $50 + $40 is less than the current $100 EMV and the above rules do not apply to opening options and futures transactions.
Maintenance
Purchase: maximum (25% * marginable stock value, $25,000) or maximum (100% * non-marginable stock value, $25,000). If there was an increase in US securities positions between 16:00 - 15:50, between 15:50 - 16:00 ET initial margin requirements will be applied.
Short sale: if last sale price/share >= $17 then maximum (25% * marginable stock value, $25,000), else if $17 > last sale price/share > $5 then maximum ($5 * marginable shares, $25,000), else if last sale price < = $5 then maximum (maximum (marginable market value, $2.50 * marginable shares), $25,000) or maximum (100% * non-marginable stock value, $25,000). If there was an increase in US securities positions between 16:00 - 15:50, between 15:50 - 16:00 ET initial margin requirements will be applied. Short sale proceeds are applied to cash and the short position is subtracted from equity.
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Can you believe that they instituted this rediculous structure without even giving us any notice?!! Even their help desk didn't have a clue what was happening! I wonder what recourse a trader that had a position liquidated while he was in compliance with their stated margin requirements would have? I am really pissed off that they would make a change like this without so much as a day's notice. I sent IB an e-mail and I hope some of the rest of you will too.
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"Patterned Day Trading" margin requirements are as follows:
Initial
Purchase: maximum (25% * marginable stock value, $25,000) or maximum (100% * non-marginable stock value, $25,000). From 15:50 - 16:00 ET, maximum (50% * marginable stock value, $25,000) or maximum (100% * non-marginable stock value, $25,000) will be applied.
Short sale: if last sale price/share >= $17 then maximum (25% * marginable stock value, $25,000), else if $17 > last sale price/share > $5 then maximum ($5 * marginable shares, $25,000), else if last sale price < = $5 then maximum (maximum (marginable market value, $2.50 * marginable shares), $25,000) or maximum (100% * non-marginable stock value, $25,000). From 15:50 - 16:00 ET, maximum (50% * marginable stock value, $25,000) or maximum (100% * non-marginable stock value, $25,000) will be applied. Short sale proceeds are applied to cash and the short position is subtracted from equity.
In addition for approving new opening orders in stocks, prior night's Equity with Margin Value (as of 16:00 ET) must be >= Account's Total Initial Margin Requirement.* Any opening stock order not meeting this criteria will be rejected.
*Example
A customer desires to purchase XYZ stock for $100. Equity with margin value (EMV) from prior night is $40, and current EMV is $100. Customer currently owns options with an initial margin requirement of $50. The customer would not be allowed to make this stock purchase as the $25 margin requirement (25%*100) for the stock plus the $50 margined requirement for the options is greater than the $40 EMV from the prior night. No liquidation would take place even though the option margin requirement of $50 is greater than last night's EMV of $40. In addition if a customer wanted to add an option position with an initial margin requirement of $40, it would be allowed as $50 + $40 is less than the current $100 EMV and the above rules do not apply to opening options and futures transactions.
Maintenance
Purchase: maximum (25% * marginable stock value, $25,000) or maximum (100% * non-marginable stock value, $25,000). If there was an increase in US securities positions between 16:00 - 15:50, between 15:50 - 16:00 ET initial margin requirements will be applied.
Short sale: if last sale price/share >= $17 then maximum (25% * marginable stock value, $25,000), else if $17 > last sale price/share > $5 then maximum ($5 * marginable shares, $25,000), else if last sale price < = $5 then maximum (maximum (marginable market value, $2.50 * marginable shares), $25,000) or maximum (100% * non-marginable stock value, $25,000). If there was an increase in US securities positions between 16:00 - 15:50, between 15:50 - 16:00 ET initial margin requirements will be applied. Short sale proceeds are applied to cash and the short position is subtracted from equity.
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Can you believe that they instituted this rediculous structure without even giving us any notice?!! Even their help desk didn't have a clue what was happening! I wonder what recourse a trader that had a position liquidated while he was in compliance with their stated margin requirements would have? I am really pissed off that they would make a change like this without so much as a day's notice. I sent IB an e-mail and I hope some of the rest of you will too.
wb,
I feel your pain. I can't believe they would liquidate your positions when you were in compliance with their stated margin requirements! I am confused by this. If I am reading their NEW statement correctly, I think the 2/1 margin applies from 3:50 to 4:00 IF you added to your positions after yesterday's close or this morning's open. Does that fit with your experience?
Man, if I would have put on a position after the close or before the open (which I often do) I would have had half of my holdings liquidated at 3:50 today!! As it was, I just closed positions to stay ahead of the maintenance requirement, and couldn't put any new positions on - a really rotten way to trade; but, I was not liquidated at 3:50. Does anyone understand all of this? I know def is working on getting some info., but I am confused.
This doesn't really apply to me since I don't day trade stocks. BUT, my understanding is that daytrade margin is basically 4:1, but that 10 minutes before the close they bring the margin into line with overnight margin requirements which are 2:1, not 4:1.
What's the problem with this. You're being required to close out your positions 10 minutes before the close assuming you are over the 2:1 Reg T requirement.
What am I missing?
OldTrader
What's the problem with this. You're being required to close out your positions 10 minutes before the close assuming you are over the 2:1 Reg T requirement.
What am I missing?
OldTrader