Is anyone day trading with IB Portfolio margin account?

[Robert Morse]

Right, the platform is showing me 15% Margin, but the Rep. said that that's the "up to" not what their algorithm will allow

That is because it can change intraday. A few years ago at my old firm, we had a few IB accounts. Lightspeed has a fair number using LVX. Back then BABA was trading around 113 and intra day the requirement went from 15% to 2.5X that. My client's BP went from $65K to $600 in a few minutes. Every time the stock went up, his margin went up. He was long stock and 40 vertical call spread. When the stock went down, his BP went up. A little backwards. I called and ask why. 2 hours later they told me they increased risk on BABA intraday. I asked why they did not send a notice and they said they do not do that. I asked if the stock continued to go up, and his BP went negative, what would happen. They told me he would get a partial liquidation. I asked why they would use the 2.5X PM for a vertical call spread and they said it affects the symbol and all positions.

He was making money as the stock was up almost 4 points that day. The client liquidated the next day and closed his account.

 

[d08]

That sucks ... I believe they have some formula which they suggest to follow to avoid liquidation. Did you not follow it intentionally or just got a hair over it unintentionally? Just curious because for some strategies it's not a big deal, but for some it would be pretty bad.

I'm often on the edge. It's completely unnecessary as these are not microcaps. Some years ago this was not an issue at all. Now it's a constant problem.

Their formula won't help me as the margin reqs vary insanely, I cannot incorporate that into my models, I rely on approximations.

I'm sure a horde of IB defenders will arrive now and tell me how all these unconnected equities could lose 90% at once, in seconds, and how the risk department is actually protecting customers. Complete nonsense for anyone with even basic understanding of markets.

 

[Risepoint1879]

I'm often on the edge. It's completely unnecessary as these are not microcaps. Some years ago this was not an issue at all. Now it's a constant problem.

Their formula won't help me as the margin reqs vary insanely, I cannot incorporate that into my models, I rely on approximations.

I'm sure a horde of IB defenders will arrive now and tell me how all these unconnected equities could lose 90% at once, in seconds, and how the risk department is actually protecting customers. Complete nonsense for anyone with even basic understanding of markets.

They are driving me away with all this headache. I am a day trader with .10-.30 cent stops, there is no risk of a huge loss. If anything happens, I'm right there to close it out. I don't need them to protect me, and limit what I can do.

It's very jarring to get orders rejected while I'm trading, and then I have to guess what share size they will allow for a particular stock, all while trying not to miss my short lived entry point.

"Our margin rates are non-negotiable." Well then fuck you, I'll go somewhere else where they won't proudly force unnecessary risk-management down my throat.

I was hoping PM would be less strict, but it seems like it might not be, especially for me where I'm putting my whole position in one stock at a time, which they deem to be more risky.It's too bad, because their account dashboard and sending funds in and out is so easy to use.

They don't cater so well to day trading, even though it would generate the most profit for them.

 

[d08]

They are driving me away with all this headache. I am a day trader with .10-.30 cent stops, there is no risk of a huge loss. If anything happens, I'm right there to close it out. I don't need them to protect me, and limit what I can do.

It's very jarring to get orders rejected while I'm trading, and then I have to guess what share size they will allow for a particular stock, all while trying not to miss my short lived entry point.

"Our margin rates are non-negotiable." Well then fuck you, I'll go somewhere else where they won't proudly force unnecessary risk-management down my throat.

I was hoping PM would be less strict, but it seems like it might not be, especially for me where I'm putting my whole position in one stock at a time, which they deem to be more risky.It's too bad, because their account dashboard and sending funds in and out is so easy to use.

They don't cater so well to day trading, even though it would generate the most profit for them.

If you're a discretionary trader and not attached to their tech in any way, go with Lightspeed or some other alternative. Easy problem to solve.

 

[Risepoint1879]

If you're a discretionary trader and not attached to their tech in any way, go with Lightspeed or some other alternative. Easy problem to solve.

The only thing I'm attached to is DAS Trader, so I am looking at Centerpoint Securities who has that platform option.

 

[Robert Morse]

The only thing I'm attached to is DAS Trader,

Have you ever tried a demo of Lightspeed Trader or Sterling?

 

[Risepoint1879]

Have you ever tried a demo of Lightspeed Trader or Sterling?

I'm sure they would work just fine. The important thing about DAS Trader for me is a custom hotkey where I can click a stop loss point, and it will automatically calculate share size based on how much I am willing to risk per trade.

Are you aware of such a function on Lightspeed?

 

[Robert Morse]

Our stop orders are set with a value vs the Bid., Ask, Prev close, Positon Price or Position Cost basis. This is a Sell stop set $0.50 below the bid and will close out the Full position, with a position sell 0. It is set to request a pop up so you can change the price or share size with the up/down arrow keys. The default market for stop is EDGX as they are server side.

 

[cruisecontrol]

Their formula won't help me as the margin reqs vary insanely, I cannot incorporate that into my models, I rely on approximations.

Actually you can model the margin requirements very accurately as long as you are not hitting their undocumented "concentration risk" thresholds.

For equities, P.M. requirement is the maximum of:
a) 15%
b) any stock specific special margin requirement as listed at ftp://shortstock:ftp3.interactivebrokers.com/
c) "A market-based stress of the underlying. A five standard deviation historical move is computed for each class. This five standard deviation move is based on 30 days of high, low, open, and close data from Bloomberg excluding holidays and weekends. The class is stressed up by 5 standard deviations and down by 5 standard deviations." (I just copy pasted this from the site)

Also keep in mind that initial margin is 110% of maintenance, and shorts require collateral of 102% of the price rounded up to the nearest dollar.

 

[Sig]

Actually you can model the margin requirements very accurately as long as you are not hitting their undocumented "concentration risk" thresholds.

For equities, P.M. requirement is the maximum of:
a) 15%
b) any stock specific special margin requirement as listed at ftp://shortstock:ftp3.interactivebrokers.com/
c) "A market-based stress of the underlying. A five standard deviation historical move is computed for each class. This five standard deviation move is based on 30 days of high, low, open, and close data from Bloomberg excluding holidays and weekends. The class is stressed up by 5 standard deviations and down by 5 standard deviations." (I just copy pasted this from the site)

Also keep in mind that initial margin is 110% of maintenance, and shorts require collateral of 102% of the price rounded up to the nearest dollar.

This can't possibly be true in my experience with them. The margin goes up by a huge amount at random times when the stocks in my portfolio hadn't changed and hadn't moved. There's no way in hell "This five standard deviation move is based on 30 days of high, low, open, and close data from Bloomberg excluding holidays and weekends.", you wouldn't see that behavior. The only solution to this is to leave IB, and good riddance!