Interactive Brokers margin requirements

M

minioptions

On Jan 22nd the markets opened with the Dow down 400 and the S&P down 50 points. The margin requirements on futures for normal trading hours are half the over night requirements. I figured that the market would move up like it usually does on a very low open but if it didn't I would close or move some open positions.

Interactive Brokers decided at the open that they would not change to the day margin requirements. This made my margin twice what I thought it would be and resulted in a margin call. Over the next half hour Interactive Brokers closed half of my positions at the worst price of the day. The program locked me out so that I could not buy or sell anything. Since there is no way to get money into the account or talk to anyone at Interactive Brokers within half an hour there was nothing to do but watch the account get wipe out.

I never heard of a broker using over night margin requirements during the day. Other brokers I check with had normal requirements. :eek:
 
I remember they had some running notification at the top of their website about margin requirements changing, but I don't know for how long.
 
Quote from minioptions:

On Jan 22nd the markets opened with the Dow down 400 and the S&P down 50 points. The margin requirements on futures for normal trading hours are half the over night requirements. I figured that the market would move up like it usually does on a very low open but if it didn't I would close or move some open positions.

Interactive Brokers decided at the open that they would not change to the day margin requirements. This made my margin twice what I thought it would be and resulted in a margin call.
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This doesn't make sense to me. If you had open positions before the open then you would of been on full margin. After the open, you would of still been on full margin. Tell me what I am missing here.
 
they did this last summer (double the day margin maintenance).

i'm surprised they locked you out of the account. i thought they allow closing trades when you exceed your margin maintenance.
 
Quote from FortuneTeller:

This doesn't make sense to me. If you had open positions before the open then you would of been on full margin. After the open, you would of still been on full margin. Tell me what I am missing here.
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My take is, he was on full margin, but barely enogh to cover the contracts, then market tanked, he figured as soon as RTH margin kicks in, he'd be able to absorb the losses, and still keep his open positions. But day margin never kicked in, so his positions got liquidated.

Another case of overleveraging, and under capitalization. Even if IB dropped down the margin to $500/contract, I don't think that would have helped him.

Schaefer
 
Set aside, for a moment, questions about OP's money management. The real question, I think, is this:

Why in God's name does anyone put up with a broker that yo-yos with its daytrading margin?
 
I had adequate margin at the close Friday. Foreign markets tanked Monday but U.S. markets were closed. Margin changes don't take effect until the market opens.
 
Agree. To the best of my knowledge, IB is the only broker raising intra-day requirements to overnight levels. Add that to the horrible customer service they provide and it's time to shop elsewhere.

Quote from tortoise:

Set aside, for a moment, questions about OP's money management. The real question, I think, is this:

Why in God's name does anyone put up with a broker that yo-yos with its daytrading margin?
More...
 
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