I am not posting my portfolio here, but I can do better. Here is what I get if I try to purchase 100 shares of XIV current price $92.63 initial margin required $18566. So again need 18566 to purchase $9263 in etn. You can check this by previewing a buy order of 100 shares on XIV.
Interactive Brokers Incorrect Option Margin Requirements
- Thread starter frostengine
- Start date
Not sure if this hurts or helps but when I preview a buy 100 of XIV, I get an Initial Margin Change of $8,729 (limit price 92.98).
Now how about buying atm vxx put vxx is @ 41.20 so looking at oct 41 put trading at 2.55. This order increases my initial margin by $232. Try it with any other option like spy and you will see 0 increase in initial margin.
So this is the problem, there is no tail risk or any kind of exposure, outright buys are margined @ 200% for etns and ~100% for options. Its an error I am sure, but their customer service process is too broken to get this through to the right people. I really hate moving, I love their API and lot of other stuff, but this new margin and the fact that it now changes daily is just killing any other benefit they might have over other places.
So this is the problem, there is no tail risk or any kind of exposure, outright buys are margined @ 200% for etns and ~100% for options. Its an error I am sure, but their customer service process is too broken to get this through to the right people. I really hate moving, I love their API and lot of other stuff, but this new margin and the fact that it now changes daily is just killing any other benefit they might have over other places.
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Wow, is it a cash account or an IRA ? Thanks
Actually it has to be cash, IRA shows 0. Could someone else check this please ? and SPRSTPD, you think you could check an option impact on your initial? Thanks.
How could it be if the discussion is about margin requirements!
Algotrader12 - Has anyone at IB ever mentioned your account may have been restricted from a previous margin violation. You mention you have cash, but what limited data you resented makes it look like your account is restricted. I would ask them and see folr what time period you are in the penalty box ?
Well I suppose it is possible that they are stress testing only accounts with heavy vol shorts. Or maybe implemented some kind of concentration based margin. It would be nice of them to actually explain to me whats going on. Having said that one of my accounts only holds cash, and has same margin requirements (unless they increased margin for all my accounts ). Ajacobson do you use IB ? can you check what you see for xiv long and buying vxx puts?
This thread is starting to remind me of my top 10 best conversations with IB "customer service"
1. Display a stunning lack of understanding of basic financial products.
2. Misunderstand the underlying issue is a way that is almost certainly willful except for 1 above.
3. Condescendingly act as if the customer is an idiot. Especially grating given 1 and 2 above.
4. Refuse to admit that IB could ever actually have a bug or just be wrong. Spend 10 times more effort denying the issue that it would take to just start fixing it.
1. Display a stunning lack of understanding of basic financial products.
2. Misunderstand the underlying issue is a way that is almost certainly willful except for 1 above.
3. Condescendingly act as if the customer is an idiot. Especially grating given 1 and 2 above.
4. Refuse to admit that IB could ever actually have a bug or just be wrong. Spend 10 times more effort denying the issue that it would take to just start fixing it.
"Well I suppose it is possible that they are stress testing only accounts with heavy vol shorts. Or maybe implemented some kind of concentration based margin. It would be nice of them to actually explain to me whats going on. Having said that one of my accounts only holds cash, and has same margin requirements (unless they increased margin for all my accounts ). Ajacobson do you use IB ? can you check what you see for xiv long and buying vxx puts?"
I'm more than happy to answer your question - yet you continue to obfuscate your answers. I don't use IB, but I can't as I was once a vendor to them. Our desk trades with the bank desks as we trade primarily Eurex derivatives.
We run a US and Europe vol. book and we don't experience any of your issues.
Do we pay more in commissions ? Absolutely, but I'll give you odds we have less overall friction and far better liquidity - but we pay for it.
Algotrader12 - now here comes the big question that you have continuously avoided - have you had a margin violation at IB?
We pay 100% for all options - we are able to get some relief for very long dated, but it's not material.
I'm more than happy to answer your question - yet you continue to obfuscate your answers. I don't use IB, but I can't as I was once a vendor to them. Our desk trades with the bank desks as we trade primarily Eurex derivatives.
We run a US and Europe vol. book and we don't experience any of your issues.
Do we pay more in commissions ? Absolutely, but I'll give you odds we have less overall friction and far better liquidity - but we pay for it.
Algotrader12 - now here comes the big question that you have continuously avoided - have you had a margin violation at IB?
We pay 100% for all options - we are able to get some relief for very long dated, but it's not material.