Problems trading futures in IRA accounts at IB?

Trader13 said:
IB's website still indicates that futures trading is not allowed in IRA accounts despite the letter they published stating the contrary.
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Trader13:
The IB email said that they messed up and were restoring the capability to existing accounts. My guess is that new IRA accounts are not getting futures authorized and will not be offered futures trading capability until the new high margin policy is in place. So if I were IB I'd put that "no futures" info on the capabilities web page.

Jack
 
I got this today:

Dear Client,

Effective April 15, 2015, IB will be implementing a margin increase which will serve to limit the leverage afforded to futures and futures options held in IRA accounts. The purpose of this change is to limit the firm's exposure to losses from derivative contracts that may exceed assets on hand plus permitted IRA contributions. The effect of this change, when implemented, will generally be to increase margin requirements on such products to 3 times that of the current requirement.
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After this increase, IRA accounts will need to meet the increased margin requirements in order to initiate new positions. Accounts that are margin compliant in all respects, with the exception of the increased requirement, would be permitted to hold existing positions. In accordance with our standard policy, accounts which that fall out of margin compliance with the current levels will be subject to forced liquidation.
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This won't kill me, although I hope the margin on front-month VIX contracts isn't tripled - that would mean $31K margin on a contract worth generally $15K to $18K. (I'd understand a larger than usual margin on short holdings.)
 
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loufah said:
I got this today:



This won't kill me, although I hope the margin on front-month VIX contracts isn't tripled - that would mean $31K margin on a contract worth generally $15K to $18K. (I'd understand a larger than usual margin on short holdings.)
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Yes, so as I understand it, IB will now require 3x the normal margin for IRA accounts.

This won't be a problem for me, since I trade with conservative leverage, but anyone day trading may be in for a shock.
 
The wording is unclear but seems to say that the maintenance margin level that triggers forced liquidation is not being increased and remains at "current levels".
 
loufah said:
The effect of this change, when implemented, will generally be to increase margin requirements on such products to 3 times that of the current requirement.
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So the initial margin for ES:

For most brokers = $5,060 (the exchange margin)
For IB = $5,750 (non-IRA account)
For IB = $17,250 (IRA account)

It's hard to justify tying up so much more funding that can easily be more efficiently allocated elsewhere.

And don't forget those IB "exposure fees."
 
EnergyTrader said:
The wording is unclear but seems to say that the maintenance margin level that triggers forced liquidation is not being increased and remains at "current levels".
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Energy:
The advisory says "accounts that are margin compliant in all respects, with the exception of the increased requirement, would be permitted to hold existing positions.".

I think maintenance margins on positions in place prior to April 15th are "grandfathered", not positions opened after April 14th.

Jack :
 
Looks like the new margins took effect just now - I was autoliquidated out of some positions that I opened today.

Margin for buying front-month VIX futures (at $13.75, multiplier 1000) is now $30934.
Margin for buying second-month VIX futures (at $15.60, multiplier 1000) is now $19984.
 
loufah said:
Looks like the new margins took effect just now - I was autoliquidated out of some positions that I opened today.

Margin for buying front-month VIX futures (at $13.75, multiplier 1000) is now $30934.
Margin for buying second-month VIX futures (at $15.60, multiplier 1000) is now $19984.
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These margin requirements are totally insane. It's like 5x exchange minimums.
 
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