Quote from brownsfan019:
That's not true at all.
I've been trading for a number of years full-time now and I am with OEC. I do not WANT high margins B/C I DO NOT NEED THEM.
You missed my sarcasm sir. I was trying to convey that they must have a lot of inexperienced traders who were going nuts with $500 margins and were surprised this Monday, Tuesday or Wed. if they survived the first two days. If they catered to a more Elite group of traders I am sure this kind of "protection" would not have been put in place. Then again maybe they were just looking out for their customers.
Open E Cry raises ES margins from $500 to $2250
- Thread starter DerekD
- Start date
"What's the point of having cash sitting there earning nothing?"
It is called seriously overusing leverage. I would love my firm to get rid of $500 margins. It is an unnecssary risk.
$500 controlling $70,000 in eminis? That is insane and uncessary. That kind of trader a broker can do without.
One hiccup, and the account goes up in smoke. A market could theoretically move 10% or more in seconds or minutes. some people seem to not grasp things like Oct 19, 1987. There were few buyers to be found.
Another thing, called "locked limit"
But the dazed and confused wander on...
It is called seriously overusing leverage. I would love my firm to get rid of $500 margins. It is an unnecssary risk.
$500 controlling $70,000 in eminis? That is insane and uncessary. That kind of trader a broker can do without.
One hiccup, and the account goes up in smoke. A market could theoretically move 10% or more in seconds or minutes. some people seem to not grasp things like Oct 19, 1987. There were few buyers to be found.
Another thing, called "locked limit"
But the dazed and confused wander on...
Lock limit means you can't sell below the limit. And the first tier of lock limit only lasts for 10 mins. But markets don't gap to lock limit.
What's more, we're talking about intraday trading - not holding overnight were almost all lock limits have occured.
Lastly, OEC disallows reduced margins for accounts that drop below $2000 in equity. IB should adopt such a program. Perhaps with some sort of tiered individual account triggering algo given that they allow for the trading of an assortment of products.
Or, if an account's only trading permission is to trade futures, IB should exempt daytrade margin suspension rules since this sort of account would be eaiser to monitor with a simple algorithm. In fact, since IB is into the technology thing, if all positions are covered with a stop, IB should allow 25% of SPAN margins for a futures only account.
Just my opinion.
Quote from osorico:
And lets not forget...
While OEC did raise INTRADAY margins to a (whopping!) 50% of the exchange minimum overnight margin amount, IB ELIMINATED INTRADAY MARGIN!
As someone else mused, let's see whos first to repeal, and by how much.
As a trading business myself, it's clear which firm is more interested in MY business. With an appropriate balance of augmented risk managment.
Osorico
It appears that IB has relaxed the suspension:
http://individuals.interactivebrokers.com/en/trading/marginRequirements/margin.php?ib_entity=llc
At least their margin page says so for ES, ER2 & NQ.
The homepage still has the ticker that says the suspension is still on.
We'll see when the market opens.
OEC increase is still in effect. They update the margin rules by 7 AM EST.
intraday trading is not automatically safer. People who do this tend to load up on a lot more leverage. If someone suddenly said Pakistan and India exchanged nuclear weapons (even if untrue) for example, then the clever people long $500 daytrading margins to control a lot of eminis would be in a bloodbath. And they plan to keep doing it, day in and day out, possibly for many years. The exposure is there. And it is conceivable the brokerage would go under having a lot of these customers.
We have been in a period of relative calm. We have had burps, like the southeast asian currency/market crisis a few yeras ago. the trunami. The yellowstone caldera, arab-israeli tensions, the great depression, a dirty bomb/radiation bomb/bioterror in a western city, etc. It only takes a STORY about something to wipe out these highly leveraged day traders.