Intraday Margin requirements

[John9999]

I just learned that with my IB account it is $3486 to open a NQ trade and $2789 for the ES ?????

This is much higher than my Futures account I have (approx $500 or so)... and AMP and others...

Why is IB so high?

 

[Robert Morse]

Why is IB so high?

Or, why are some so low? Take a look at the this list of FCMs. You will find that the FCMs with the least net capital offer day traders the lowest margin. They do that to focus on day traders as those that take overnight positions require the FCM to put up 8% of your margin with their own money. They just don't have the capital for that.
http://www.cftc.gov/idc/groups/public/@financialdataforfcms/documents/file/fcmdata1117.pdf

We clear at Wedbush Futures. We offer no less than 25% of SPAN. I would never offer 10%. Too risky for the client and the broker/FCM. Looks like IB is a little worse than 50% for DT. A little higher than many, but not horrible. Overnight, they do require more than SPAN. That is much worse than most.

Bob

 

[MattZ]

I don't disagree with My colleague above that smaller firms can not afford to have large overnight exposure. Also, I would never encourage anyone to overleverage his/her account even if they are given low margins as that would not be prudent risk management. But, we nevertheless choose to deal with multiple FCMs and smaller ones like AMP as well. The reality is that AMP Clearing pays a lot for the customer, and able to provide free platforms like Multicharts, CQG, etc. that otherwise would be costly to smaller traders. through the larger FCMs. Again, we choose to deal with a number of FCMs because you cant fit everyone under one umbrella.

 

[southall]

I just learned that with my IB account it is $3486 to open a NQ trade and $2789 for the ES ?????

This is much higher than my Futures account I have (approx $500 or so)... and AMP and others...

Why is IB so high?

Even worse Intraday Initial Margin for RTY and EMD at IB:

RTY: $4,511
EMD: $11,475

RTY now has 4x volume of TF which it is replacing, yet TF has 50% lower intraday margin at IB.
Ive been trying to get IB to introduce intraday margin on RTY for months now but they just ignore me.

But to answer your question, at least for products like ES and NQ, IB seem to set overnight maintenance margin at 20:1 leverage. And intraday maintenance margin at 40:1.

eg if a contract has notional value of $100,000, IB seem to want $5000 overnight maintenance margin (20:1) and $2500 intra day (40:1)
Initial margin is a bit more than maintenance margin.

Overnight margin on the DAX and ESTX50 futures are even worse at IB, about 10% of the notional or 10:1 leverage.

I think IB now has 125 billion in client funds, so they are being extra conservative with how much leverage they give clients.