Huge margin Increase with Interactive Brokers ?

[Deltatrader]

Has anyone else noticed a 400% increase in margin rates with Interactive Brokers lately? I trade short options on Treasury Bonds and Notes (STRANGLES) on ZN & ZB.
Last week 7-15-2008 IB sent out bulletins saying that they would have gradual daily increases in margin rates to more accurately reflect the risk in short options. We'll it turned out to be not such a gradual daily increase. My margin increased by Fourfold (400%) OVERNIGHT. ! I woke up Thursday morning to find that IB had liquidated a large portion of my positions. If anyone else has experienced this, Please post a reply.

 

[nine]

So we get a loser or shill coming here to slander a good broker. And rude enough to copy his foolish post from another thread (so I shall be equally rude, apologies mods, and answer in both threads).

IB, by raising margins has protected their customer base from fools who trade with too little margin in volatile times.

Why do we need this you say? Brokers have insurance. Well, interestingly enough many brokers don't but because of the universal account sweep IB's is pretty good. So, why do they need to be conservative? Because when a broker gets into the deep brown stuff because they let too many customers overextend themselves into margin calls we all suffer. If they're not insured you lose some of your money and even if they are you spend months or years getting your trading accounts sorted out again.

So, thanks IB for being careful in your business operations. Your solid retail and professional clients appreciate your concern.

 

[bradl112]

Nine I would not call anyone a loser just because they have a problem and are asking for help.

 

[gbulle]

You are right..... it is absurd to increase the margin of 300%/400%
..it is reasonable to increase 20%, 30% but not 300%!!.
No one other respectable broker (I checked with italian brokers, singapore brokers, usa brokers) has increased the margins.

I do not agree with nine; IB has a very efficient "call margin" management system not existing at other brokers.
Apparently "non efficient" brokers not applying real-time SPAN calculations are not "non efficient" or gamble brokers but probably only more clever....in my opinion.....


Today the initial margin of DEEP OUT THE MONEY CALL/PUT on GERMAN BUND
is 3K EUR.... at the same time the initial margin to SELL/BUY the underlying BUND is about 3K EUR....it is illogic!!!

Obviously I am changing broker.

Regards
GB

Has anyone else noticed a 400% increase in margin rates with Interactive Brokers lately? I trade short options on Treasury Bonds and Notes (STRANGLES) on ZN & ZB.
Last week 7-15-2008 IB sent out bulletins saying that they would have gradual daily increases in margin rates to more accurately reflect the risk in short options. We'll it turned out to be not such a gradual daily increase. My margin increased by Fourfold (400%) OVERNIGHT. ! I woke up Thursday morning to find that IB had liquidated a large portion of my positions. If anyone else has experienced this, Please post a reply.

 

[Brumby]

IB, by raising margins has protected their customer base from fools who trade with too little margin in volatile times.

The issue is not about what IB needs to do to protect its business model and adjust its risk profile in line with market risk (is not why) but the issue in my view is whether IB had given adequate and reasonable notice (but how) so clients are able to make appropriate adjustments to their situation. I don't trade options and maybe in this business such scale of margin adjustment is common practice. If I was IB, maybe the right thing to do is to give 24 hours notice that such scale of adjustment is imminent and that clients should make appropriate adjustments to their positions. Pulling a rug is no way to keep a client.

 

[VielGeld]

^ Err... This thread is from 2008. Considering what happened back then, I think 300% is about right.