suffering from margin call constantly

[maxinger]

In the recent a few months, I suffered from margin call almost every trading day. Although from my point of view my portfolio is hedged well and I tried to reduce the margin as much as I could before the eod (quite often with the "help" from IB's forcing liquidation), the margin would still explode overnight and in the next morning I would see my account was with margin deficit again, from 20% ~ 60% over my total equity. Then I was given 10 minutes to fix the problem, which was often not successful because my attempted order was often rejected because IB think such order would cause margin deficit increase. And often the liquidation would kick in and I have to spend another a few hours to clean up the mess caused by the liquidation. Some times I couldn't fix it well - the market bounced back right after IB liquidated my position at a very bad price. In the Friday it would be even harder because there would be an additional post expiry margin deficit. I have no way to see the impact to such margin from the order at all, until the order was actually executed.

I composed several tickets to IB CS but so far I didn't get good answer. They usually just replied with generic information like what margin call is or why there would be liquidation when there was margin deficit. They would not disclose the details on how they calculate the margins, only saying it is their portfolio or risk based margin. BTW the link in their page to the "OCC's published list of Product Groups and Offset Parameters" is dead https://www.interactivebrokers.co.u...ex=us&rgt=1&rsk=0&pm=1&rst=101004010808010801

Anyone has the similar experience here? Can you advise how would you deal with such annoyance?

You should give up trading
unless you have shown to be able to eliminate your over-trading problem.

Don't issue the ticket to IB.
Issue the ticket to yourself as you are overtrading.

 

[taowave]

Are you trading PM??
Are you buying shorter dated wings for protection that expire,leaving the position vulnerable to a big adverse move??

Sounds like you are short spreads and delta hedged..

Do you get blown out at the short strike on expiry if you dont delta hedge??

Something is off....

can you post a hypothetical position??

There is "post expiry margin" that work as what you described. Last friday it was >500% in the morning. Around 3pm I managed to reduce it to around 130%. I couldn't reduce further because the attempting orders were rejected and IB determine they would cause initial margin deficit. And then the liquidation reduced it to 90%. On Saturday after the assignment of the expiry options, the current margin stayed at 90%. But now on Sunday it increase to 120% again.

 

[smallfil]

bingo. something like that except I also buy far OTM options to survive with the extreme market move.

You have a gambling problem. Buying OTM options is like going to Las Vegas and betting it all on one pull at a slot machine. 99% of the time, you will lose all your monies, 1% you can get lucky and actually, make monies but, not enough to cover all those losses. And if you are going to gamble, go to Las Vegas. Atleast, you will get free food, maybe a room for your troubles. Nothing if you lose it gambling on Wall Street.

 

[newwurldmn]

Are you trading PM??
Are you buying shorter dated wings for protection that expire,leaving the position vulnerable to a big adverse move??

Sounds like you are short spreads and delta hedged..

Do you get blown out at the short strike on expiry if you dont delta hedge??

Something is off....

can you post a hypothetical position??

you are putting in a lot of work when the guy could easily post his account positions and show a real example. it would have taken 5 minutes to help him, but his inconsiderateness has cost you hours.

 

[Buy1Sell2]

Overnight margins are higher. Thank you for your time.

 

[weij]

You have a gambling problem. Buying OTM options is like going to Las Vegas and betting it all on one pull at a slot machine. 99% of the time, you will lose all your monies, 1% you can get lucky and actually, make monies but, not enough to cover all those losses. And if you are going to gamble, go to Las Vegas. Atleast, you will get free food, maybe a room for your troubles. Nothing if you lose it gambling on Wall Street.

Are you trying to say the time decay of a long option? Yes, the OTM options would usually expired with no value. As I mentioned in an other post in this thread, the over all theta is positive. So they are some cost I'd like to take for the protection, and also hopefully to lower the margin. The latter is not taken well by IB though.

 

[weij]

Are you trading PM??
Are you buying shorter dated wings for protection that expire,leaving the position vulnerable to a big adverse move??

Sounds like you are short spreads and delta hedged..

Do you get blown out at the short strike on expiry if you dont delta hedge??

Something is off....

can you post a hypothetical position??

The actual portfolio is pretty messy, with more than 100 options of different strikes and expires. And they varies from time to time. For instance, if the short term option is relatively expensive, it would be like short ATM of the near term and long OTM of the far term, which makes the PnL curve in a roughly W shape.
But I guess my question should not be related to the specific portfolio. I assume no matter what it is, as long as the market doesn't shake up, the margin should not change much over night. No?
If such assumption doesn't hold, such risk system doesn't make sense at all. Other than the market risk, we have to expose another unpredictable (margin) model risk.

 

[weij]

Overnight margins are higher. Thank you for your time.

someone also mentioned "Overnight margins". What do you actually mean? There is "projected look ahead margin" and they are with exactly same value as the current margin. And when the latter jumps overnight, the former does so, too.

 

[Buy1Sell2]

someone also mentioned "Overnight margins". What do you actually mean? There is "projected look ahead margin" and they are with exactly same value as the current margin. And when the latter jumps overnight, the former does so, too.

Day margins are quite a bit less than overnight margins.

 

[Overnight]

Day margins are quite a bit less than overnight margins.

When it comes to IB, that is not true. They are a F-you-at-drive-thru place. This is based on reports I have seen from other posters here that use IB.