Why is IB discounting my forex margin by ~29K?

[mbessle42]

I don't understand how IB is calculating margin requirement. If I buy $6M worth of EUR.USD (3% margin), I expect IB to calculate my margin as $6M * 3%. However, what I'm finding is that they are subtracting from the margin requirement my account balance * 3% as well. So if I purchase an amount worth my account size, the margin requirement is $0. My account size is about $1M, thus the 29K discount I mention in the title.

Any ideas why?

Thanks!

 

[JamesJ]

You have 50k USD and sell 1M USD against EUR.
Ibkr handles it as a real conversion, not a trading position.
Thus you know have: - 950k USD and long 1M worth of EUR.
Exposure to EURUSD is 950k, the other 50k in EUR are just sitting there.