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
 

stevet

Established member
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
 

sidinuk

Established member
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.
 
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stevet

Established member
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?
 

juanbyte

Well-known member
Thanks Lads

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

Thanks in advance
 

juanbyte

Well-known member
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
 

oatman

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

juanbyte

Well-known member
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.
 

juanbyte

Well-known member
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.
 

darrren

Member
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
 

stevet

Established member
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
 

darrren

Member
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
 

darrren

Member
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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