IB's New IRA Margin Account

Quote from brokershopping:

Hopefullly someone from IB can give us the official story?

It is really hard for me to believe they won't let you OUT of a position.
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I felt the same way about PDT...couldn't believe that this could ever happen in the EU...I mean US...

NK
 
Quote from brokershopping:

Hopefullly someone from IB can give us the official story?

It is really hard for me to believe they won't let you OUT of a position.
More...
Don't get this wrong. They can NEVER keep you from closing a position, no matter what the rules are. You are just going to be restricted for 90 days if you do before settlement date.

The PDT is a little more stringent. If you daytrade under 25K and you're a PDT our brokerage firm HAS to close your account. (I do not work for IB though)
 
I contacted IB about this, and it sounds like they might still be deciding how to handle it.

per IB chat:

"you can use the sales proceeds to trade again"
"to buy and sell over and over is still to be reviewed"

I asked about the 90 day restriction if you sold a stock bought with unsettled proceeds...

"that is for a taxable account"



I am sure it is as frustrating for IB as it is for me to figure out this BS. They (the regulating bodies) should flush this whole 'daytrading' stupidity where it belongs.
 
Staying within the spirit of SEC regulations, different brokers have been handling the issue (i.e., when to release the buying power from previous trades) slightly differently in IRA/cash accounts. IB has been slow to respond in this regard. It is good that they are at least now thinking of changing their own ways of handling IRA/cash accounts. I hope they come to a conclusion fast and publicize their IRA/cash account policy changes.
 
There is no new account. You simply change your IRA from "Cash" to "Margin".

Here is an extract from the IB announcement (emphasis added):

IRA Margin Accounts Now Available

IRA Margin Accounts that allow you to immediately trade on your proceeds rather than having to wait for your proceeds to settle, trade assets in multiple currencies, and trade limited option spread combinations are now available. IRA margin accounts have certain restrictions in comparison to regular margin accounts, and borrowing is never allowed in this account. See our Trading Permissions page for more information. You may upgrade an IRA Cash Account through Trading Permissions under Account Management.

Jack
 
I also learnt from IB chat that IB will not charge any margin interest in the IRA accounts even if you use the unsettled funds since no borrowing is allowed in the first place. By the way, other brokers who restore buying powers before the settlement date also do not charge any margin interest or any other fees in this regard. The accounts will still need to follow PDT rules.
 
I got conflicting information from IB-chat and IB phone customer service representatives on the new IRA-"margin" account:

-IB-chat says I can do unlimited round-trip trades using the unsettled funds if I have $25k or more in my IRA account. PDT rules apply.

-On the other hand, IB phone customer service representative says I can only do two round-trip trades using the unsettled funds in the IRA account per day. Buying power will not be replenished immediately after the 2nd round-trip trades of the day. However, the buying power will again be replenished next day. The new IRA-"margin" account is kind of misnomer since there is no margin borrowing, interest, etc. associated with it, and therefore no PDT rules apply.

Can anyone kindly confirm what is actually allowed and what is not allowed in IB's new IRA-"margin" account?
 
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