Is anyone day trading with IB Portfolio margin account?

[GRULSTMRNN]

I have to disagree with you here, despite me holding your intellect and how you share it in very high esteem. I have a multi million usd advisor account that I hold and actively trade with IB. I opted out of PM and never faced the issues you are describing. My risk tolerance lies perfectly within the parameters that the non PM margining system at IB provides.

Having said that margining is just one aspect of the entire consideration which broker to choose. Safeguarding funds for me is the absolutely top priority and in 19 years of trading retail non corporate accounts I trust IB'a ability to safeguard my funds more than any other, smaller shop. I am sure some outfits that offer Lightspeed or what have you may be better suited for spread traders but I personally would not feel my funds are treated with the same protection and care than they are at IB.

So, my point is, margin is only one aspect of the entire question of broker and safekeeping choice. We should speak up to IB and keep up complaining about non sensical policies and some issues re margining with IB are non sensical, I am totally on your page here. Many issues that were flawed over the years at IB got fixed and it was because customers kept on complaining and voted with their wallets. That is why IB got better. If I was investing and not trading I would probably choose UBS to safeguard my funding. But I would certainly not choose a lesser secure and less assuring institution than IB regardless of whether I disagree with their margining algorithms.

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.

 

[d08]

I have to disagree with you here, despite me holding your intellect and how you share it in very high esteem. I have a multi million usd advisor account that I hold and actively trade with IB. I opted out of PM and never faced the issues you are describing. My risk tolerance lies perfectly within the parameters that the non PM margining system at IB provides.

Having said that margining is just one aspect of the entire consideration which broker to choose. Safeguarding funds for me is the absolutely top priority and in 19 years of trading retail non corporate accounts I trust IB'a ability to safeguard my funds more than any other, smaller shop. I am sure some outfits that offer Lightspeed or what have you may be better suited for spread traders but I personally would not feel my funds are treated with the same protection and care than they are at IB.

So, my point is, margin is only one aspect of the entire question of broker and safekeeping choice. We should speak up to IB and keep up complaining about non sensical policies and some issues re margining with IB are non sensical, I am totally on your page here. Many issues that were flawed over the years at IB got fixed and it was because customers kept on complaining and voted with their wallets. That is why IB got better. If I was investing and not trading I would probably choose UBS to safeguard my funding. But I would certainly not choose a lesser secure and less assuring institution than IB regardless of whether I disagree with their margining algorithms.

That makes sense and it's yet another aspect when choosing a broker. I'm fairly confident in having my funds with IB and know less about Lightspeed. I'd have to trust the insurance of deposits.

Regarding non-PM, it does sound better for many. However, as I'm trading multiple different strategies, I'm taking advantage of the margining regarding low vol ETFs using PM and this would disappear with a non-PM account.
The situation currently is that you might be short S&P and long multiple S&P equities (positive index correlation) and there is no margin benefit, all positions are treated as additional risk. I'm sure you'd understand why this is absurd. Their PM requirements are getting stricter every day and I have to re-iterate that I'm not trading extremely large concentrated positions in microcaps.

To get IB to change their margining policies to something more reasonable is the reason I'm commenting. There are IB people on ET and I hope they listen to customer complaints, I find it more sensible than talking to a completely random CS person.
I speculate that IB's risk department gets a pat on the back whenever they go stricter with complete disregard how it would affect traders. I hope they listen.

 

[d08]

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.

Thanks. However, have you seen the list of stocks with special margin requirements? It used to be fairly small, it has ballooned a lot in the recent years. Besides, it's impossible to model based on it as it's continuously changing.

 

[elt894]

The situation currently is that you might be short S&P and long multiple S&P equities (positive index correlation) and there is no margin benefit, all positions are treated as additional risk. I'm sure you'd understand why this is absurd.

I get that it's absurd, but I think they're constrained by the OCC's PM requirements which don't provide any offsets for single names. However they could probably relax their heightened margin requirements in these cases to compensate, requiring the maximum of their proprietary model and the OCC's.

 

[mskl]

I've been using PM at IB for many years (when it was introduced). It fits my trading as I virtually never have any speculative positions as everything is hedged (options/futures/equity) so the margin requirement properly reflects the positions I have.

I have seen some holes in PM where investors can actually put on more "hedged" positions than they actually should be able too but overall it is quite good. As such I actually have my own soft requirements - like limiting the notional value I have on any one equity/commodity even if the position is completely hedged (ie conversion).

for speculators (most of you) - PM may not give you lower requirements

 

[qwerty11]

The situation currently is that you might be short S&P and long multiple S&P equities (positive index correlation) and there is no margin benefit, all positions are treated as additional risk. I'm sure you'd understand why this is absurd. Their PM requirements are getting stricter every day and I have to re-iterate that I'm not trading extremely large concentrated positions in microcaps.

Regarding S&P 500 and its constituents: this is just standard (PM) practice, there is no single broker that allows what you want.

http://www.themargininvestor.com/pl-offsets.html

(I'm not talking about the nowadays very long IB specific list of 100% margin stocks)