IBKR suddenly changed margin requirements?

[ids]

9% is the minimum rate for any ETF in IB. Most probably you become concentrated in one or two positions. This alternative margin test will set 30% rate for concentrated positions and 5% rate for the rest of the portfolio. Concentrated portfolio is something under your control and IB will not warn you about this change. As soon as your account become non-concentrated, you will see familiar rates again.

 

[manic]

9% is the minimum rate for any ETF in IB. Most probably you become concentrated in one or two positions. This alternative margin test will set 30% rate for concentrated positions and 5% rate for the rest of the portfolio. Concentrated portfolio is something under your control and IB will not warn you about this change. As soon as your account become non-concentrated, you will see familiar rates again.

Thank you. This is what happened.

Are IBKR's portfolio margin requirements similar to those of other brokers? For instance, do most of them have a 9% minimum, an average of roughly 15%, and a requirement of 25% for higher risk ETFs like junk bonds?

 

[qwerty11]

Meanwhile, the junk bond ETFs now have a 5% margin requirement. My treasury bond ETF also went from a 9% margin requirement to a 5% margin requirement.

Impossible. Every stock/ETF has a minimum of 15%, also the lowest risk categories like currency or bond ETF's.

There are only a few exceptions for broad based / sectors. The lowest margin is:

High-Capitalization Broad Based Indexes
Market Move Range:-8% to 6%
Indexes:

• Broad Based Indexes
  
• European Indexes
  
• Growth Indexes
  
• Value Indexes
  
• Japan Indexes
  
• FTSE 100 Index
  
• S&P 500 Buy Write Index

So that is 6% for long S&P500 but not for bond ETFs...

 

[qwerty11]

9% is the minimum rate for any ETF in IB. Most probably you become concentrated in one or two positions. This alternative margin test will set 30% rate for concentrated positions and 5% rate for the rest of the portfolio.

Interesting info. The 30% for 2 largest / concentrated is is a known number but the 5% for the rest (in that scenario) is new info. That gives a better understanding of concentrated calculation...

Note that on IB website also a minimum of 6% is mentioned for broad based. So I wonder if your 9% is correct:

https://www.interactivebrokers.com/...0&pm=1&rst=101004100808#portfolio-margin-page

 

[MoreLeverage]

Are IBKR's portfolio margin requirements similar to those of other brokers? For instance, do most of them have a 9% minimum, an average of roughly 15%, and a requirement of 25% for higher risk ETFs like junk bonds?

No, IB’s PM requirements are way better than most. Most others I’ve used or investigated are never lower than 15% (as IB is for larger ETFs), don’t have a risk offsetting system for crediting risk reduction on longs vs shorts, and have a much more limited set of “PM eligible” things (typically only large cap stocks and big ETFs). Ineligible stocks or ETFs would not get the 15% rate, but instead 30% might be typical, while perceived “higher risk” ones would be 50%+.

That said, if you really want 15% on junk bonds, you might try talking to E*TRADE or TD Ameritrade to see if your favorite ETFs qualify for their 15% rate. Arguably IB is being overly conservative here, so you might find someone who will give you better than their increased 25% rate. You’d also want to factor in what margin rate you’d be paying into your calculations since IB is often much more competitive there and financing rates matter when you’re 6x leveraged...

 

[ids]

I stand with 9% minimum and I know the subject well. 8% down and 6% up is the OCC minimum. IB has it a bit higher.

 

[Sig]

Ineligible stocks or ETFs would not get the 15% rate, but instead 30% might be typical, while perceived “higher risk” ones would be 50%+.

So there are firms that provide worse than Reg-T margin for their PM accounts? Why wouldn't you just open up a Reg-T account with them and trade those stocks in that account....and given you could do that why would they provide worse margin in PM?

 

[MoreLeverage]

So there are firms that provide worse than Reg-T margin for their PM accounts? Why wouldn't you just open up a Reg-T account with them and trade those stocks in that account....and given you could do that why would they provide worse margin in PM?

Brokers can set any margin they want for stocks higher than the legal minimums. For those where the PM requirements are higher than Reg T minimums, their non-PM requirements are equal or worse.

 

[Sig]

Brokers can set any margin they want for stocks higher than the legal minimums. For those where the PM requirements are higher than Reg T minimums, their non-PM requirements are equal or worse.

Got it, makes sense.

 

[Robert Morse]

This is basically very true. There are a number of symbols (Mostly ETNs and any fixed-income product) that are not PM eligible. The most typical way to treat these symbols in a PM account is to apply the same margin as they apply to Reg-t accounts.

Brokers can set any margin they want for stocks higher than the legal minimums. For those where the PM requirements are higher than Reg T minimums, their non-PM requirements are equal or worse.