Firstly, I am not an IB client, past or present. Make of that what you will.
Quote from IBj:
Those who were around in 1989 and trading options will recall quotes for puts like 300-400. On an index that was only 500. When one has a market for an instrument 28% wide, 4% margin does not really cover the problems.
Since when are option margins, option quotations, and the option market et al likened to regulated futures markets that do not utilize a market maker model?
We aren't really worried about going out of business and taking clients down with us. That is a problem for small FCMs perhaps.
Im sure Delphi, Interstate Bakeries, PG&E, and many others past and future never intend(ed) to go broke and take employees and clients with them. Maybe you should worry about going out of business. What a stupid, self-righteous, self-serving statement...
We aren't really worried about going out of business and taking clients down with us. That is a problem for small FCMs perhaps. ha.
But our low commissions are supportable by not ever taking losses on clients. If our gross revenues are 80M a quarter, net say 50, then if we were to drop 10M due to client losses, it would not affect our financial stability at all. But are you willing to pay 20% higher commissions (10M/50M) to altruistically support your fellow risk-taking brethren?
Who the hell do you think you are? IB as a business controls all things associated with all aspects of doing business with you. Additionally IB as a business has the right to refuse or deny to do business with anyone. You dare to place "guilt" on traders of certain instruments and/or certain types of trading
which you offer and/or allow? Why not close the accounts you deem too risky, and cease offering the products deemed too risky? An intraday futures trader at IB is unsavory with known capabilities of causing harm to others? Nice. Merv the Perv. Good thing your trading desk was able to offload that 37M loss last quarter. What's the altruistic way of support for those traders, my brother.
Lastly, please note that the exchanges have been raising their margin requirements as well. Please look at the CFE changes on the VIX options and futures. Or the recent GLOBEX increases. Everyone is examining their risk paradigms, we just did it faster. When more realistic risk metrics are in place, we will adjust appropriately.
What you really mean to say is regulatory requirements are changing, sometimes daily, but no other firms have taken the changes to the extreme that IB has. What if the VIX never returns to single digits? Or worse, continues to rise? Maybe you'll be first-to-market with 2x exchange requirements, adjusted appropriately of course, if the exchanges don't follow.
Osorico
FS
