Shorting a $10 stock with IB; I need everyone's help...

Everywhere else there's a 30% rule but IB has this weird "you must have $5 for every share you short" rule......

For example:

$10,000 account
Trader Shorts 2000 shares at $10

At IB: the account will be liquidated begining at $10.01 ...

At firms with 30% margin maintenence, the stock can move much much higher before the trader is liquidated.....
 
Really, why would you risk your capital on only one trade ? Ten percent is even too much. Calm down and think this out.
 
At the unmentionable firms (datek, etrash etc) they don't have a $5 per share requirement for shorts --- it's just a 30% maintenence the same as when you go long........I'm just trying to confirm that I was understanding this correctly......


I mean, at IB you'll be liquidating immediately, and at the other firms they will give you some room, down to 30%, when you short your whole account..........
 
To reiterate what some have already said...

You might want to put more thought into why you would bet your whole account on one position.

IB might be doing you a favor by getting you out of that situation.
If they're going to liquidate you, it's for good reason...too much at risk!
 
IB's short maintenance margin is exactly what the NASD rules have required. Thanks for the link Jorge.

It seems the cause of the original post in this thread is the fact that other brokers issue margin calls, and IB doesn't. The other brokers might give you 5 days to add funds to your account if your short positions go the wrong way.
 
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