Margin

juanbyte

Well-known member
Hi

Can someone tell me what the margin requirement for trading the mini-Dow contract is with IB

I am confused as it says half-margin at certain times

margin can change all the time since it is calculated in realtion to volatility

so you need to check on a daily basis to make sure what it is

there is a set amount of margin required to trade - but some brokers will cut that amount

and during the normal trading hours when stock exchanges are open margin is normally charged at 50% of the normal rate

then once you are in a trade already - the margin amount to continue in the trade is then another amount lower

if you think about it - this is important since you might enter the trade with a margin of say 1,250 for the ym, and just have 1,250 in your account ( not possible as this is probably below the minimum amount you need for your account to operate - but the figure is just for the example) - the second the ym goes against you - you would be making a loss and therefore the value of you account would be below the 1,250 and you would get the trade closed -

to stop that happening - you are allowed to have a margin of say, 1,000 once you are in the trade - so there is a margin amount to open the trade and then a lower margin requirement once the trade is open, so as long as you stay above 1,000 - the trade will stay open - but if you close that trade and have less than 1,500 in your account - you would not be able to open a new trade

watch out for variances in timing of when the 50% margin applies - and check the time it finishes - quite often a period before the close - but also some brokers offer very low margin amounts which offer incredible leverage - dangerous if you are losing - great if you are winning

For daytrades (2.30pm to 8.45pm GMT) the initial margin is \$1,250 with maintenance margin of \$1,000. If you hold overnight then the margins are twice this, ie \$2,500 and \$2,000.

Last edited:
sidinuk

you answered in pounds for a dollar derivative

if a broker prices the margin in pounds for a dollar derivative - will they keep that value all day - or will they adjust it for currency moves?

sorry Stevet, I meant \$'s. I will change the post.

cheers for pointing that out.

I do not have hold overnight, but it is best not to be under funded so I think I will work on \$2k per contract.

When ever I win more than 10k or over 200% in a month with finspreads, strange things happen to my trading, the quotes take ages and bear no resemblance to the market. This is why I want to trade the real thing.

I do have a couple more questions if you don't mind.

Are all IB accounts in dollars, my bank makes quite a bit on conversions about 4% plus a fee, is there any way around this e.g. having a dollar account.

Also can you phone IB to place a trade if internet connection is lost

oatman

I just want to trade the mini-Dow or mini-S&p

I am still confused about the currancy of the account as everything on their sight say it must be funded in dollars

I will just have to open an account

Your account will be opened in the currency of origin.
I heard you still use ££ sometimes in Manchester :cheesy:

Oatman

Oh yes £££'s thats the stuff we get for lead and copper piping

Will have to convert some of my tobacco back into sterling

If your account is in £££, won't trading the Dow just be £2.941 instead of \$5.

:cheesy:

juanbyte,

You can fund in Sterling and trade US\$ products no problem.

Give them a call on 0207 397 6422 if you want more info.

Thanks filly

Are there any know problems with IB that I have not asked about

Juanbyte,

They don't hand hold and you couldn't call them a full service broker.

Helpdesk is in Switzerland not UK, but there is a toll free number.

I have used it twice, got through pretty promptly. I think in the past help desk has been the weakest part of the service. Have a trawl around the boards, generally support feedback is positive now.

They will charge you a higher rate to execute a trade over the phone if you lose connectivity though.

Hi Juan

YES - Their trading platform is c**p. So much so that others write their own front ends for it.

If you wan't to see what a good platform looks like, see the Speedtrader Demo (free, full version for 7 days.

On second thoughts, don't go and look at it or the IB platform will irritate you even more after seeing Speedtrader.

Darren

darrren

believe it or not - IB actually rent out their trading interface to other companies to use as their trading platform for their own systems

the IB platform is kinda crap - but IB never really wanted to encourage high volume trading - hence they offer a fixed and low commision regardless of volume

and IB offer api access to anyone who wants to write their own front end - which is why a bunch of people have written front ends which they now supply and IB is quite happy about that

for anyone who wants to go real high volume - IB also offers another way of hooking into them using FIX which offers much faster trading access - and is an industry standard language for trading

Darren

Does speedtrader offer futures, what are their fees.

Stevet

Thanks for that info.

Juan

Go to www.Speedtrader .com for all the details and access to their demo software - no credit card needed.

You can get their comm rate down to \$9.95 by signing up via one of their agents.

The reasons I went with IB were security of a well established firm and low comm rates.

If Speedtrader were a big firm and their rates were like IB, I would have gone with Speedtrader. I found their platform a dream. Within a minute of entering you can work everything out and feel confident to trade immediately. NOT SO with IB.

Darren

Juan

I THINK it is \$7.99 you can get them down to, not \$9.95.

I will get the details for you if you decide you are going to open an account with them.

Darren

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