IB Margin requirements rising as VIX falls, reaching nonsense levels

newwurldmn said:
Of course, you can build your own risk management system and go to a broker who values customer service more: The kind of broker who gives you a nice friendly phone call asking you to clean up your margin call by 3pm. That’s what I chose to do.
More...
I think I'm heading in that direction too. However if IB's system was better (not hard to do), they could at least give more margin to customers who are properly hedged, etc. This is not exactly rocket science.
 
  • Like
Reactions: d08
newwurldmn said:
Of course, you can build your own risk management system and go to a broker who values customer service more: The kind of broker who gives you a nice friendly phone call asking you to clean up your margin call by 3pm. That’s what I chose to do.
More...

I sincerely hope that one of those brokers creates (or funds someone) an open source tool to convert IB API code to their own. There's a lot of unhappiness and lots of money to be made by someone who does this. I'm amazed how few in the sector see value in good APIs and are focused on visual platform features which are irrelevant to many many traders.

I trade US stocks (mostly not smallcaps) similarly to @cruisecontrol with relatively tight stops and short holding times -- margins are equal to the trashiest dollar stocks with no liquidity. Logic abandoned, from a customer's perspective.
 
newwurldmn said:
Yup. But is correlation risk for IB. They have 100mm in equity and 5bn in customer deposits (for example). If everyone borrows the max under regt then IB has to borrow 5bn from some counterparty. If 2percent of the customers blow up, then IB is finished.
More...

I must be slow because I don't follow the logic. Why would IB's equity cover the blowups? Unless you mean blowing up and losing more than their deposits?
 
southall said:
Which parts of the API are you tied to?
More...

Execution, data, the whole thing. It's a mistake on my part but I'm not alone in this, I hope someone does see this opportunity to grab a large share of the market.
 
d08 said:
Execution, data, the whole thing. It's a mistake on my part but I'm not alone in this, I hope someone does see this opportunity to grab a large share of the market.
More...

It is never as bad as it looks.
My main issue issue would be if my new chosen platform didn't support the same order types i am used to using on IB.
The API calling bits of my ATS can always be re written.
I could even keep my IB data feed bits, and still get my data from IB, initially anyway.
I would first re-route my order placing logic, so it doesn't go to IB but the new platform. Then i would move over the execution reporting calls, so i get back fill reports.

I think the main bit of work would be any new logic needed to compensate for missing order types.
 
Last edited:
d08 said:
Execution, data, the whole thing. It's a mistake on my part but I'm not alone in this, I hope someone does see this opportunity to grab a large share of the market.
More...


There are startups like Alpaca, but may be going about this a wrong way, focusing on free/zero commissions and selling the order flow, instead of focusing on smart routing, advanced order types, margin, etc.
But it may be worth watching or even trying for some strategies.
 
  • Like
Reactions: d08
We had gold trades today. I could not believe my eyes, Initial margin on 1 gold futures contract was almost $24,000. We were testing higher margin level of our account size during night and early morning. We wired more money today, just in case for next week.

I am like 24K - WTF.
 
RedDuke said:
We had gold trades today. I could not believe my eyes, Initial margin on 1 gold futures contract was almost $24,000. We were testing higher margin level of our account size during night and early morning. We wired more money today, just in case for next week.

I am like 24K - WTF.
More...
That's a $240 move in gold, right? Seems a bit excessive.
 
You must log in or register to reply here.
Back
Top