Problems trading futures in IRA accounts at IB?

I happen to have an acquaintance with a top executive at IB and I emailed him on this situation. He just emailed me the following reply:

"I heard about this notice mishap and i am sorry about it. It was an error. Hopefully we will not make that kind if error again.

Yes, we had to discontinue because of regulatory concerns.

And, we are doing what we can to make affected customers happy."

Given the recent reports of permissions being restored, perhaps existing IRA customers with futures permissions will be grandfathered in? Time will tell...

Gary
 
I was surprised to see my permissions enabled this morning. (Friday, the 13th) I don't know if that is good luck or bad. I think I will wait a few days to see if it sticks. Still no message from IB.
 
The problem with all these informal/back channel communications is they are not definitive. I've got my permissions back, but will they disappear without warning again? IB needs to get something official out. They probably have a bunch of lawyers who have to approve such a statement - but a week?

Jack
 
It is reliably reported that "special margining" will be implemented for IRA accounts. What that means is still being worked. Implementation date is unknown. Probably depends on the programmers. Possible message from management today.

Jack
 
This just arrived however my confidence is not restored.

Futures Trading in IRA Accounts
Dear Client,

In advance of a policy change intended to address the risks of trading futures in IRA accounts, we inadvertently removed futures trading permissions from a number of accounts last week, subjecting clients to unnecessary uncertainty and confusion. We have since taken the steps necessary to restore permissions and sincerely apologize to all who were impacted.

As for the policy change, in the near future we will be implementing increased margin requirements on futures and options on futures contracts held in IRA accounts. This change is intended to limit the firm's exposure to losses from derivative contracts in IRA accounts that may exceed assets on hand plus permitted contributions.

The effect of the change will be to apply increased intraday and overnight margin requirements to IRA accounts holding futures contracts that are not associated with a spread or option cover and to prohibit IRA accounts from holding naked short option contracts. Additional details as to the specific margin rates will be provided in a subsequent communication in advance of its implementation with changes to be phased in over a series of days so as to minimize the impact of any sudden margin increases.

Again, we apologize for this incident and the lack of prior communication.
Interactive Brokers Client Services
 
Just got this in my email a few minutes ago:

Dear Client,

In advance of a policy change intended to address the risks of trading futures in IRA accounts, we inadvertently removed futures trading permissions from a number of accounts last week, subjecting clients to unnecessary uncertainty and confusion. We have since taken the steps necessary to restore permissions and sincerely apologize to all who were impacted.

As for the policy change, in the near future we will be implementing increased margin requirements on futures and options on futures contracts held in IRA accounts. This change is intended to limit the firm's exposure to losses from derivative contracts in IRA accounts that may exceed assets on hand plus permitted contributions.

The effect of the change will be to apply increased intraday and overnight margin requirements to IRA accounts holding futures contracts that are not associated with a spread or option cover and to prohibit IRA accounts from holding naked short option contracts. Additional details as to the specific margin rates will be provided in a subsequent communication in advance of its implementation with changes to be phased in over a series of days so as to minimize the impact of any sudden margin increases.

Again, we apologize for this incident and the lack of prior communication.

Interactive Brokers Client Services
More...
 
johnjax said:
... apply increased intraday and overnight margin requirements to IRA accounts holding futures contracts that are not associated with a spread or option cover ...
More...
Another reason to trade spreads if you don't already.
 
johnjax said:
This just arrived however my confidence is not restored.

Futures Trading in IRA Accounts
Dear Client,

In advance of a policy change intended to address the risks of trading futures in IRA accounts, we inadvertently removed futures trading permissions from a number of accounts last week, subjecting clients to unnecessary uncertainty and confusion. We have since taken the steps necessary to restore permissions and sincerely apologize to all who were impacted.

As for the policy change, in the near future we will be implementing increased margin requirements on futures and options on futures contracts held in IRA accounts. This change is intended to limit the firm's exposure to losses from derivative contracts in IRA accounts that may exceed assets on hand plus permitted contributions.

The effect of the change will be to apply increased intraday and overnight margin requirements to IRA accounts holding futures contracts that are not associated with a spread or option cover and to prohibit IRA accounts from holding naked short option contracts. Additional details as to the specific margin rates will be provided in a subsequent communication in advance of its implementation with changes to be phased in over a series of days so as to minimize the impact of any sudden margin increases.

Again, we apologize for this incident and the lack of prior communication.
Interactive Brokers Client Services
More...

How do you "inadvertently" remove trading permissions? It takes IB a week to send this notification out? Pretty unacceptable and I wasn't even affected by this snafu. I guess they are sorting things out, but still, the lack of communication and the way they handled it is troubling.
 
the text of the email would lend credence to the rumor of this move being related to accounts that were blown out to negative values by the CHF de-peg.

anyway, looks like you will have to have call option protection to short index futures soon.
 
You must log in or register to reply here.
Back
Top