Interactive Brokers - unannounced higher margin requirements today 10/16/15?

I checked my account after you posted this. I got bumped up a few days ago. I don't use that much margin so I didn't notice, but it happened. I'll have to change some of my metrics accordingly.

As you mentioned, it would certainly be nice for IB to send an email or something giving us a heads up. We do hear precious little from them about these kinds of things.
 
rmorse said:
I had one client last year, that was long Alibaba when it was trading around 113. He was also long calls. As I was monitoring his positions, the margin requirement went up to a level that made no sense. ($150K available to $1500 available. The stock was up 4 points that day) When I called IB,they told me that they changed margin to PM*2.5 to cover the risk of the security. They even used 2.5*the long options! If the stock went up a little more, he would have been liquidated to comply. He was MAKING money that day!

There was no notice at all.

Bob
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Hi Robert! How come Margin is so reckless, when you personally are selling a person out because its Options Expiration for certain stocks how do you work it? According to three of my Brokerages "Margin is tightening its belt after getting clobbered on August 16th and Final Days of September. Margin is acting freaky even with stock options your deep in the money with.

One of my brilliant around 13:00 EST (Wed) called asking about my plans for all my ADBE Strikes because I guess its strange someone can make money trading? So I tell them, call them, email them saying (I will sell my options and you don't have to worry about Shorting or Buying) and still the idiots started to liquidate some of my Calls.


What's going on with Margin, I heard various brokerages got slammed on August 16 and Late September, some of their clients blew up taking pieces of these online brokerages along.

When I traded for my friend he dealt with all this trash, what's going on with Margin? For the Thread Author, just be careful because all of them are getting nervous about a Big Sell off coming!

My ADBE $82.50 were up 300%, the $85s were up 10x and my $87.50s I would have gotten my girlfriend 8x her money if these idiots did not step in!
 
Robert, how do you sell out a position? Do you throw them out a Market or use Limit Orders? That's the key, these fools are not willing to look out after their clients, they will use Market Orders on terrible spreads!
 
RabidTrader,

We don't set margin or risk rules, the clearing broker does. We could, if we chose, have more restrictive house rules to protect us, as we are next in line for losses as the introducing broker. However, we are expected to keep our clients compliant. If you get a risk call during the day from the clearing broker, you either have to wire in money or reduce your positions. Margin calls are only T+1. If you get a margin call, you are expected to wire in money to the clearing broker. We don't liquidate anyone's positions unless the client is not compliant with the demands of the clearing broker or we ask them to cut back. If we have to liquidate, the procedure would be up to my COO.

Autoliquidation is something the online broker have to do so they can have a million accounts.

Bob
 
So that's another aspect Traders must discount or add to their cost structure if their only focused on cheap prices. Online Brokerages, out of ten of my Brokerages there is one who has always been good about taking care of me. If some how my account carried over 50 or 100 ADBE Calls they would Short the stock being precise, making the clients get a good execution.


The question Traders need to ask themselves is "Is that cheap price worth it?" if your holding something like LABL $75s Bid is $1.50 x $7.50 getting sold at $1.90 even though the stock has $3.00 of intrinsic value. They are not very good about getting the best price even if you have seven figures in your accounts.
 
MoreLeverage said:
For my portfolio margin account at IB, today my initial margin (but not maintenance margin) was much higher than it had been yesterday with no obvious change in positions. This caused my available funds to be large and negative, allowing no opening of new positions. Excess Liquidity, based off maintenance margin, was unchanged and positive, about the same as yesterday up to market movements. Is anyone else seeing something like this?

When I contacted them, they said today there was some change for PM accounts that increased initial margin requirements by 10% per a management decision. It sounds like this was not well communicated, either to the staff nor certainly to customers such as myself.

Does anyone have more information about this?
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they can (and do that) all the time. you should see their requirements during last crash\volatility spike of 2008-2009. boy oh boy..i was holding a large portfolio of extremely liquid ,high grade corp.bonds,valuing them was a piece of cake,but that's wont matter for them. 100% on all securities. all my day trading on margin-GONE in a blink
 
Bob111 said:
they can (and do that) all the time. you should see their requirements during last crash\volatility spike of 2008-2009. boy oh boy..i was holding a large portfolio of extremely liquid ,high grade corp.bonds,valuing them was a piece of cake,but that's wont matter for them. 100% on all securities. all my day trading on margin-GONE in a blink
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Thanks for the history. Do you remember how long before they went back to more normal margin requirements? At this point, I'm just guessing that senior mgmt is getting nervous about the market overall and this is their bad way of de-risking their brokerage business a little. You'd think the market making side would hedge that, but maybe they've lost too much of their edge.
 
it took a very long time. and it was a complete mess. margin requirements changed so often-they wont even bother to update the info. i mean-you see completely different requirements on website and in real trading..those are fun times. here is a little piece of history from one of my little accounts. it's a middle of 2009

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IB ceo was asked about this on yesterdays call. Pretty bad when he doesn't even know what's up.

"
Operator

Thank you. And the next question is from Robert Forrester, a Private Investor. Your line is open.

Robert Forrester - Private Investor
Hi. Great quarter. I noticed that this past Friday, margin requirements for a lot of accounts were increased by 10% across the board without any notice and this left some leveraged hedge fund clients and individual investors scrambling to figure out what happened and why they couldn't trade.

First question is, what motivated the sudden change and what factors are you going to be looking at to consider for future changes in your margin requirements?

Second question is what changes are you thinking about for your internal process so that current and potential customers can have confidence they'll be notified of future margin changes in a timely fashion so they can manage their risk and capital accordingly?

Thomas Peterffy - Chairman and CEO
I'm extremely surprised that would have happened without notice. I think you probably have received an email that you overlooked.

Robert Forrester - Private Investor
I mean I didn't and I know a hedge fund that I know people that also didn't receive that. The front line customer service people in Chicago were not initially sure what was going on either. So it sounded like it was not well-communicated internally?

Thomas Peterffy - Chairman and CEO
That's a very bad thing. I don't know. I apologize for that. That should not have happened. I'm surprised to hear that. At any rate, we are in a very complex area here.

I assume that you are referring to margin requirements on option positions, is that correct?

Robert Forrester - Private Investor
This was for portfolio margin accounts, but certainly for equity accounts...

Thomas Peterffy - Chairman and CEO
Options in the account right?

Robert Forrester - Private Investor
No, not necessarily. Just long and short equity accounts were also affected. As far as I could tell, the maintenance requirement for almost all equities from penny stocks to SPY were increased by 1.1x from what they were a couple of days ago.

I wasn't sure if this was your take on the markets becoming more risky, or trying to derisk at a global level, or if you were trying to address some of these bad debt issues or what it was?

Thomas Peterffy - Chairman and CEO
They all have to do with derivatives. It's not -- I'm not aware of any margin increases for straight equity positions.

Robert Forrester - Private Investor
Okay.

Thomas Peterffy - Chairman and CEO
I'm sorry. I will look into it and let you know.

Robert Forrester - Private Investor
Okay. Thank you very much.

Thomas Peterffy - Chairman and CEO
Thank you."
 
The margins were raised because rumors said US markets were to go down sharply...
which is why they spiked up LOL Lots of stops to run. The essence of the game. :D
 
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