suffering from margin call constantly

[weij]

Im good with TOS...

I find it hard to believe you are trading PM and have these issues

What is TOS? and PM?

 

[weij]

I suspect implied vol is at the core of your margining problem. IV is implied from market prices and feeds into their margin calculation. Two things might be happening: 1) IV generally increases as option duration declines and IBKR seems to calculate implied on a daily basis, not using nonlinear option time; 2) IV is highest around the open. My intuition from experience is 20 delta options in high IV names might have daily margin increases until they pass a declining OTM threshold.

Unfortunately IBKR doesn't disclose their margin formulas, just broad strokes on methodology, so it's hard to know exactly what causes strange behavior and nonlinearities.

yes, trying to guess what is inside a black box.

At least they should disclose in what scenario there would be the projected loss that justified the high margin requirement. They can provide such information by answer my web ticket -- as long as it is answered by the right agent -- not all (in fact a small fraction) CSR can provide the answer. I just wish such information can be shown somewhere in the TWS instead of creating web tickets.

But what happened in this weekend is different. I'm imposed of heavy delta to two single stocks, one bullish one bearish, against my willing and would cause huge loss if the price move unfavorably. And IB rejected my attempts to reduce the delta. I can't understand how it would reduce the margin.

 

[taowave]

What is TOS? and PM?

Think or Swim and Portfolio margin..

Margin should not be a moving target..With TOS its very easy to know what percent move to look at for a given asset and what the PNL is for that given move.

And FWIW,if you are blown out per that pre determined move,maybe you should rethink your position structure as your cap hit will blow out way before you get to that point.

You are doing something very wrong

 

[Robert Morse]

Hi taowave- Unfortunately margin is a moving target. Consider that one day a stock has a IVOL of 25 and then from news, moves 100% or more in less than a day. The leverage allowed needs to change. In addition, with the OCC TIMS for PM, all stocks have a 15% requirement, but then the OCC requires clearing firms to put restrictions in place to account for illiquid and volatile symbols to protect the overall system they are the guarantee of. They have to do the same for REG-T.

Margin should not be a moving target.

 

[taowave]

Hi Rob,I thought this is where we may be heading..I dont touch those names..

I trade the big boys where I can sleep a bit better at night

Off the top of my head,stocks like MSFT and AAPL are simulated up and down 30 perecnt and one has to stay in the black under those moves...

I have been ratio-ed 1x3,where I was very long,but as the stock moved up and vol popped,I was forced to make adjustments....

Hi taowave- Unfortunately margin is a moving target. Consider that one day a stock has a IVOL of 25 and then from news, moves 100% or more in less than a day. The leverage allowed needs to change. In addition, with the OCC TIMS for PM, all stocks have a 15% requirement, but then the OCC requires clearing firms to put restrictions in place to account for illiquid and volatile symbols to protect the overall system they are the guarantee of. They have to do the same for REG-T.

 

[Robert Morse]

My comment was meant to be very generic to let you know that any stock can change from fully marginable to something more restrictive. I find it hard to blame the broker. We do not have auto-liquidation, which gives you time adjust.

Hi Rob,I thought this is where we may be heading..I dont touch those names..

I trade the big boys where I can sleep a bit better at night

Off the top of my head,stocks like MSFT and AAPL are simulated up and down 30 perecnt and one has to stay in the black under those moves...

I have been ratio-ed 1x3,where I was very long,but as the stock moved up and vol popped,I was forced to make adjustments....

 

[taowave]

So even if one is short straddles and majorly long wings wings on balance,crushes it up 30 percent,one still can be forced to liquidate/buy in options?

My comment was meant to be very generic to let you know that any stock can change from fully marginable to something more restrictive. I find it hard to blame the broker. We do not have auto-liquidation, which gives you time adjust.

 

[Robert Morse]

I can't speak for all brokers. We generally take action if a margin call or risk is ignored. We have no reason to outside of that.

So even if one is short straddles and majorly long wings wings on balance,crushes it up 30 percent,one still can be forced to liquidate/buy in options?

 

[lpope]

For what it's worth, you should reconsider your assumptions around risk (and margin). Correlations aren't always what you think they should be. Real life is GME moons and puts increase in value. This is the opposite of the assumptions in a traditional margin model. What's a broker to do? This is why I believe IBKR added this new wrinkle to their margining causing both of us grief and it protects them even if the implementation is poor.

 

[taowave]

I will say that TOS would not let me trade in GME when the sheet hit the fan.

If I remember correctly,they later on permitted trading,but were very restrictive in how you entered a position. I vaguey recall that I had to open with spreads as a seller...

Are you IB guys saying if I have a Put Fly on,my margin can increase??