IB Margin requirements rising as VIX falls, reaching nonsense levels

[Fain]

It's just crazy that this broker can do what he wants.
They have broken some rules of common ethical principles.
They have caused the closing of account of many retail trades without any real reason
Are they unable to manage risk?
The vastity of retail brokers are now returned back to the previous margins, at least for daytrading.
Interactive Brokers lacked customers interest
I hope they will be punished in a severe way by all these customers that have been betrayed
I will promote a legal action against them because they changed financial rules.
They have stopped my trading and prevented me to organize my work. I had to suffer a financial damage, searching for a new broker and in meantine stopping trading due to their arbitrary measures

every client I’ve talked to that wanted to sue for my risk department changing their margin didn’t go anywhere with it.

 

[tomas262]

I tell you IB is fucking crazy with their margin policy. Example

CME Milk Class III Nov 20 - Dec 20 intra-delivery spread maintenance margin: 840 USD / Interactive Brokers: 1,333 USD (why not double?)

As the initial margin IB requires: 4,566 USD while my other broker goes with CME to 924 USD.

4,000 USD move per contract is the entire calendar year move in this product so it is totally off

It goes across all products.

 

[ids]

IB does not want you to acquire low liquid far expirations. Hence, high initial margin. Go to the other broker and collect this stuff there.

 

[Arnie]

I think you misunderstood my post to mean that I am trading VIX products (I am not). Otherwise what you said makes no sense to me. I am talking about VIX as a proxy for overall volatility. If margins are linked to volatility, then they should be falling together with VIX. The fact that the opposite is happening for several weeks means IB's system uses a very lagging indicator of volatility, or it's a completely arbitrary decision on their part. Either way I am not impressed with this kind of risk management.

Or maybe no ones has faith in the brokers/clearing firms on the other side of the trades?

 

[Sig]

Or maybe no ones has faith in the brokers/clearing firms on the other side of the trades?

If that's the case we would see a whole lot bigger indicators in the market than IB showing unreasonable VIX margins!

 

[Saltynuts]

Wow, awesome thread. I had shorted some VIXY at high prices, made some money. But the lower VIXY went, and the more I made, my free cash, buying power, etc. kept going DOWN. I literally almost got margin called, had to sell the position and take the gain.

This, and poor recent customer service, has really soured me on IB in recent times.