Interactive Brokers

FTSE Beater

Experienced member
1,518 5
Hi All

I have to apolgise in advance for not having a degree in rocket science. :(

I've been looking through the margin requirements, and it's all gone straight over my head.

They say you can open an account for £1,450. http://www.interactivebrokers.co.uk/html/retailAccount/minDeposit.html as long as I don't day trade it. So can I do 3 day trades in a week, and make other trades as long as I hold overnight - is this correct :confused:

My main worry is the Margin calls, as I can't make head nor tail of them. If anyone knows a way of working it out - I would be very grateful
 

Miki

Member
98 1
FTSE Beater

Yes, you can open a margin (with universal account you can trade stocks and futures) account with $2,000.

During market hours you can buy (or sell short) a stock with $4,000 buying power (eg. 100 shares @ $40).

After market hours you can buy (or sell short) a stock with $2,000 buying power only (eg. 50 shares @ $40).

If you are short and your account goes below $2,000 IB will liquidate your position.

If you are long and your account goes below $2,000 IB will NOT liquidate your position (unless the value of the your stock exceeds $2,000 after hours ie you bought at 3 o'clock 100 shares @ $40).

You can trade every single day as long you buy or sell the stock one day, and exit your position the next day.

Good trading
 
Last edited:

songcon

Active member
165 4
Hi All

I have to apolgise in advance for not having a degree in rocket science. :(

I've been looking through the margin requirements, and it's all gone straight over my head.

They say you can open an account for £1,450. http://www.interactivebrokers.co.uk/html/retailAccount/minDeposit.html as long as I don't day trade it. So can I do 3 day trades in a week, and make other trades as long as I hold overnight - is this correct :confused:

My main worry is the Margin calls, as I can't make head nor tail of them. If anyone knows a way of working it out - I would be very grateful

The margin is set up so that you don't have to wait for 3 days for cash to setlle, you have purchasing power right after you sell. In order for you to qualify for a margin account set up, you need to have £1,450 to start with.

Your statement regarding day trading is totally correct. If you do 4 "day trades" (buy and sell of one issue on the same day), you need to meet the minimum capital requirements for day traders, if you stay within 3 day trades, you're OK with the £1,450 account.

Margin calls relate to the issue of the price of your holding decreased after you purchase the stock, it should not be a concern since people are doing short term tradings, wait until the prices get to be called for margin is little bit too late.
 
 
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