Sometimes 2 hours, sometimes more. Depends on what "the algorithm" in its great and infinite wisdom decides, since it runs the place.
Interactive Brokers Incorrect Option Margin Requirements
- Thread starter frostengine
- Start date
Yeah it sux and I have been caught too. But, you are forewarned. There will be a red box highlighted when you show "Account" page.
I too was very frustrated with them last Friday. Instead of making a nice profit, I lost some following their auto-liquidation rules.
I bought three 2025 AMZN put options (long, not short) expiring the same Friday. Initially price went a little bit against me, but later price fell all the way to 2005. When the price reached 2025 again, the puts went ITM, but (to my surprise) were auto-liquidated (at a loss) at that moment.
My available margin was around $45k (again I was long, not short). I later understood this happened because of "projected post expiration margin deficit". Apparently their algo decided I did not have enough $ to own 300 AMZN shares at expiration, however, my intend was never to hold until expiration, but sell before.
Does someone know when this rule gets into effect? Only on the last trading day and if so how late? Or also days before last trading day? And do other brokers have a similar policy?
I would expect a $50k account is sufficient to go long 3 AMZN options, but apparently not
The margin requirement for vertical spreads is totally nonsensical at IB. If I have a bull put spread on ES at Sell 10 Puts 2700 Buy 10 Put 2650 the most I can lose is 50 pts x 50 x 10 but IB calculates i initial margin at 72 x 50 x 10 and maintenance at 57 x 50 x 10. Retarded. I have yet to see a logical explanation for it.
They calculate margin on each leg completely independent of the other. As a result, they charge margin for a debit spread, which is obviously absurd since you pay the full price of the spread up front and can lose no more than that.
Today, I had a similar issue. I had a vertical spread 4 TSLA 455 long and 4 TSLA 465 short. Expiration was 19 June. I have been assigned for my shorts. I do not take assignments seriously as the long side normally prevents margin issues. I was wrong. IB decided in this case that I have margin issue. They did not match the assigned 400 TSLA stocks with the 4 long options. In the end they closed-out the short 400 stocks and only 2 of the long TSLA options. The remaining 2 other long options 455 suffered from todays price action. Once I understood what is ongoing after market opening it was already too late. Just loss. I have contacted them and the guy on the desk see the issue but the message I have received today pushed the responsiblity to me. In other words they do not want to reimburse me for their action. Any idead to make legal claim to IB? What was again the proposed new broker?
Happens in Spx too. Made a thread about it. Software doesn't recognizer Iron Condors when you legg in, basically half's your account
Sometimes they do, sometimes they don't. Like everything at IB it's all decided by what The Algorithm decides and no one there knows what rules are programmed into The Algorithm.