IB raising intraday margin

[JackR]

Quote from maxpi:

Is there a link to the announcement? I did not get an email from IB.

Here is the notice:


IMPORTANT MARGIN NOTICE

Effective Monday 6 August, and until further notice, there will be a significant change in the intraday margins for most stock and index futures. Specifically, the intraday margin will be set to cover a price move of 4% in the instrument, but will not exceed the regular maintenance margin. By example, a 4% move in the ES futures would require intraday margin of 4% * 1450 price * 50 multiplier = 2900 USD. The regular intraday margin is 1400 USD and the regular overnight maintenance margin is 2800 USD so for ES the intraday margin would be the same as the overnight. PLEASE NOTE THAT THE ONLY MARGINS AFFECTED BY THIS POLICY CHANGE ARE INTRADAY (REDUCED) MARGINS ON EQUITY-LINKED FUTURES AND FUTURES OPTIONS.

Please note that the statutory margin requirements for many US index futures and options imply a very small intraday margin requirement (in the case of ES, less than 2%). In light of the recent volatility in the markets, we feel it is prudent to apply margins that are consistent with this increased volatility.


Interactive Brokers Risk Management


Jack

 

[mschey]

Quote from crgarcia:

Likely they are worried that many customers may not be able to meet margin calls.
Which means that many daytraders are losing money recently.

I think it's more of a response to the increased VOL in recent increases in daily range.

 

[rayl]

Uncle Ben's gotta love that the market is finally withdrawing liquidity and doing his job for him......

 

[jimrockford]

I'm glad IB pays attention to risk control.

Irresponsible futures brokers who have low margin requirements can go bankrupt in the event of a large market event leaving customers unable to cover their trading losses. Such brokers will be on the hook to cover those debts. If such a broker goes bankrupt, and can't cover those losses, then guess who gets soaked: the non-defaulting futures customers. This means you.

So if you want to make sure you are protected from futures broker bankruptcy risks, you need to make sure that your broker has reasonably high futures margin requirements. Otherwise, you could lose it all when the broker collapses, even though your trades were totally profitable.

 

[opm8]

Quote from jimrockford:

I'm glad IB pays attention to risk control.

Irresponsible futures brokers who have low margin requirements can go bankrupt in the event of a large market event leaving customers unable to cover their trading losses. Such brokers will be on the hook to cover those debts. If such a broker goes bankrupt, and can't cover those losses, then guess who gets soaked: the non-defaulting futures customers. This means you.

So if you want to make sure you are protected from futures broker bankruptcy risks, you need to make sure that your broker has reasonably high futures margin requirements. Otherwise, you could lose it all when the broker collapses, even though your trades were totally profitable.

Holy crap are you ever out to lunch. Please trade the YM if you don't already do so as I could always use the liquidity.

opm8

 

[stock777]

opm = other peoples money


no wonder he doesn't give a ff

 

[opm8]

Quote from stock777:

opm = other peoples money


no wonder he doesn't give a ff

You're right on both counts. I created this nick to represent that which I earn. 8 is my lucky number. So there. ptttffft.

opm8

 

[joesan]

Yesterday I was trading index options when suddenly my ATS, for the first time in its life, made a sound alert to me that one order is rejected due to defficiency of capital as required by the margin list. That order had two legs and half of it was filled half rejected , I jumped from sofa to the screen, spent above ten seconds to figure out the reason for the rejection, and then made a hedge with a backup account. But as the volatility doubled recently, this 20second delay had already made a flesh wound on my account :-( :-(


According to the customer's agreement with IB, IB has right to adjust margin requirement at any time, so I do not blame them for doing that. But the point is ,when IB had raised margin requirement, they should have immediately notify the existing customers by email, rather than only a notice on their website . And as I was trading Asian indexes, I do not know whether or not IB posted a notice on their website during Asian trading times yesterday. IB should fulfill their responsibility of notification better.

 

[QQQBALL]

Quote from opm8:

You're right on both counts. I created this nick to represent that which I earn. 8 is my lucky number. So there. ptttffft.

opm8

have you ever wondered how 8 can be lucky for EVERY chinese person? :0

 

[sporky]

Quote from joesan:


But the point is ,when IB had raised margin requirement, they should have immediately notify the existing customers by email...

I got the notice as a flashing red bar on the top of TWS first thing monday. Seems to me one of the best places to notify clients is in your trading s/w, no?