us forex margin requirements on stocks
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Us forex margin requirements on stocks forexgridmaster review sites

Us forex margin requirements on stocks

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Under SEC-approved Portfolio Margin rules and using our real-time margin system, our customers are able in certain cases to increase their leverage beyond Reg T margin requirements. For decades margin requirements for securities stocks, options and single stock futures accounts have been calculated under a Reg T rules-based policy.

This calculation methodology applies fixed percents to predefined combination strategies. With Portfolio Margin, margin requirements are determined using a "risk-based" pricing model that calculates the largest potential loss of all positions in a product class or group across a range of underlying prices and volatilities.

However, Portfolio Margin compliance is updated by us throughout the day based on the real-time price of the equity positions in the Portfolio Margin account. Please note, at this time, Portfolio Margin is not available for U. Portfolio or risk based margin has been utilized for many years in both commodities and many non-U. Dependent upon the composition of the trading account, Portfolio Margin may require a lower margin than that required under Reg T rules, which translates to greater leverage.

Trading with greater leverage involves greater risk of loss. There is also the possibility that, given a specific portfolio composed of positions considered as having higher risk, the requirement under Portfolio Margin may be higher than the requirement under Reg T. Part of the reasoning behind the creation of Portfolio Margin is that the margin requirements would more accurately reflect the actual risk of the positions in an account.

Thus, it is possible that, in a highly concentrated account, a Portfolio Margin approach may result in higher margin requirements than under Reg T. One of the main goals of Portfolio Margin is to reflect the lower risk inherent in a balanced portfolio of hedged positions. Conversely, Portfolio Margin must assess proportionately larger margin for accounts with positions which represent a concentration in a relatively small number of stocks.

Under Portfolio Margin, trading accounts are broken into three component groups: Class groups, which are all positions with the same underlying; Product groups, which are closely related classes; and Portfolio groups, which are closely related products. The portfolio margin calculation begins at the lowest level, the class. All positions with the same class are grouped and stressed underlying price and implied volatility are changed together with the following parameters:.

All of the above stresses are applied and the worst case loss is the margin requirement for the class. Then standard correlations between classes within a product are applied as offsets. Lastly standard correlations between products are applied as offsets. For stocks and Single Stock Futures offsets are only allowed within a class and not between products and portfolios. After all the offsets are taken into account all the worst case losses are combined and this number is the margin requirement for the account.

For a complete list of products and offsets, see the Appendix-Product Groups and Stress Parameters section at the end of this document. Our real-time, intra-day margining system enables us to apply the Day Trading Margin Rules to Portfolio Margin accounts based on real-time equity, so Pattern Day Trading Accounts will always be able to trade based on their full, real-time buying power. Because of the complexity of Portfolio Margin calculations it would be extremely difficult to calculate margin requirements manually.

Fixed Income. Mutual Funds. US Metals. You can change your location setting by clicking here. Interactive Brokers Home. Note: These formulas make use of the functions Maximum x, y,.. Proceeds from the short option are applied. Maintenance Margin Same as initial margin. Day Trade : any trade pair wherein a position in a security Stocks, Stock and Index Options, Warrants, T-Bills, Bonds, or Single Stock Futures is increased "opened" and thereafter decreased "closed" within the same trading session.

Pattern Day Trader : someone who effects 4 or more Day Trades within a 5 business day period. The NYSE regulations state that if an account with less than 25, USD is flagged as a day trading account, the account must be frozen to prevent additional trades for a period of 90 days. We have created algorithms to prevent small accounts from being flagged as day trading accounts, to avoid triggering the 90 day freeze.

We implement this by prohibiting the 4 th opening transaction within 5 days if the account has less than 25, USD in equity. Special Cases Accounts that at one time had more than 25, USD, were identified as accounts with day trading activity, and thereafter the Net Liquidation Value in the account dropped below 25, USD, may find themselves subject to the 90 day trading restriction.

The restrictions can be lifted by increasing the equity in the account or following the release procedure located in the Day Trading FAQ section. The proceeds of an option exercise or assignment will count towards day trading activity as if the underlying had been traded directly. Deliveries from single stock futures or lapse of options are not considered part of a day trading activity. What is the definition of a "Potential Pattern Day Trader"? What is a PDT account reset? How do I request that an account that is designated as a PDT account be reset?

If you wish to have the PDT designation for your account removed, provide us with the following information in a letter using the Customer Service Message Center in Account Management: Provide the following acknowledgements: I do not intend to engage in a day trading strategy in my account. I understand that if, following this acknowledgement I engage in Pattern Day Trading, my account will be designated as a Pattern Day Trading" account, and you the broker will apply all applicable PDT rules to my account.

Create a ticket in the Message Center, then paste the aforementioned acknowledgements, your account number, your name, and the statement "I agree" into the ticket form. Submit the ticket to Customer Service. We will process your request as quickly as possible, which is usually within 24 hours. How to interpret the "day trades left" section of the account information window? For example, if the window reads 0,0,1,2,3 , here is how to interpret this information: If today was Wednesday, the first number within the parenthesis, 0, means that 0-day trades are available on Wednesday.

Portfolio Margin Under SEC-approved Portfolio Margin rules and using our real-time margin system, our customers are able in certain cases to increase their leverage beyond Reg T margin requirements. Portfolio Margin Eligibility Customers must meet the following eligibility requirements to open a Portfolio Margin account: An existing account must have at least USD , or USD equivalent in Net Liquidation Value to be eligible to upgrade to a Portfolio Margin account in addition to being approved for uncovered option trading.

Existing customers may apply for a Portfolio Margin account on the Account Type page in Account Management at any time and your account will be upgraded upon approval. The Exposure Fee is calculated on all calendar days and is charged to the account at the end of the following trading day.

The exposure fee charge on Monday's activity statement reflects the charges for Friday, Saturday and Sunday. Exposure Fee calculation periods which include a holiday are determined in the same manner as that of a weekend. The fee is calculated on the holiday and charged at the end of the next trading day.

Interactive Brokers Home. Margin Requirements. Wizard View Table View. The exchange where you want to trade. The product s you want to trade. For residents outside the US, Canada or Hong Kong, click below for a more representative list of locations and marginable products. Where do you want to trade? Select product to trade. Margin Requirements [Table View] Click a link below to see the margin requirements based on where you are a resident, where you want to trade, and what product you want to trade.

Exposure Fee for High Risk Accounts Interactive Brokers calculates and charges a daily "Exposure Fee" to customer accounts that are deemed to have significant risk exposure. The calculation may be subject to change without notice and is based on a proprietary algorithm designed to determine the potential exposure to the firm that an account presents. The Exposure Fee may change each day based on market movements, changes in the account's portfolio, and changes in the formulas and algorithms that IBKR uses to determine the potential risk of the account.

The Exposure Fee is calculated daily and deducted from affected accounts on the following trading day. Accounts subject to the exposure fee should maintain excess equity to avoid a margin deficiency. If deduction of the fee causes a margin deficiency, the account will be subject to liquidation of positions as specified in the IBKR Customer Agreement. Accounts that are subject to both an overnight position Inventory fee and an Exposure Fee will be charged the greater of the two fees.

The Exposure Fee is not a form of insurance. The client is still liable to IBKR to satisfy any account debt or deficit. Whether an account has been assessed and has paid an Exposure Fee does not relieve the account of any liability. Nor will the debt or deficit to IBKR be offset or reduced by the amount of any exposure fees to which the account may have been assessed at any time. The Exposure Fee is calculated for all assets in the entire portfolio.

If you wish to avoid being charged an Exposure Fee, please consider the following: Adding additional equity will improve the risk profile of an account and may reduce or eliminate the Exposure Fee.

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By the session opening on Mondays the leverage applied to such positions reflects their notional value as per general margining terms. Please also note that the above terms can be applied on a special notice to other days of the working week in cases where holidays may affect the trading schedule. If you choose to select a decreased leverage rate, the notional value ranges applicable to your positions begin from those specified for the selected leverage in the above tables.

Margin requirements for markets other than listed above, can be found in Contract Specifications by selecting the needed instrument in the look-up menu. Leverage up to , , - 1,, 1,, - 2,, over 2,, Leverage up to , , - , , - 1,, over 1,, Leverage up to , , - , over , Put and call must have same expiration date, underlying multiplier , and exercise price. Pattern Day Trading rules will not apply to Portfolio Margin accounts.

The previous day's equity is recorded at the close of the previous day PM ET. Previous day's equity must be at least 25, USD. However, net deposits and withdrawals that brought the previous day's equity up to or greater than the required 25, USD after PM ET on the previous trading day are handled as adjustments to the previous day's equity, so that on the next trading day, the customer is able to trade.

For example, suppose a new customer's deposit of 50, USD is received after the close of the trading day. Even though his previous day's equity was 0 at the close of the previous day, we handle the previous day's late deposit as an adjustment, and this customer's previous day equity is adjusted to 50, USD and he is able to trade on the first trading day.

Without this adjustment, the customer's trades would be rejected on the first trading day based on the previous day's equity recorded at the close. The system is programmed to prohibit any further trades to be initiated in the account, regardless of the intent to day trade that position or not. If an account receives the error message "potential pattern day trader", there is no PDT flag to remove.

The account holder will need to wait for the five-day period to end before any new positions can be initiated in the account. If the intraday situation occurs, the customer will immediately be prohibited from initiating any new positions. Customers should be able to close any existing positions in his account, but will not be allowed to initiate any new positions. Once the PDT flag is removed, the customer will then be allowed three day trades every five business days.

If an account gets re-flagged as a PDT account within days after the reset, the customer then has the following options:. Once the account has effected a fourth day trade in such 5 day period , we will deem the account to be a PDT account. If you wish to have the PDT designation for your account removed, provide us with the following information in a letter using the Customer Service Message Center in Account Management:.

If today was Wednesday, the first number within the parenthesis, 0, means that 0-day trades are available on Wednesday. The 2 nd number in the parenthesis, 0, means that no day trades are available on Thursday. The 3 rd number within the parenthesis, 1, means that on Friday 1-day trade is available. The 4 th number within the parenthesis, 2, means that on Monday, if 1-day trade was not used on Friday, and then on Monday, the account would have 2-day trades available.

The 5 th number within the parenthesis, 3, means that if no day trades were used on either Friday or Monday, then on Tuesday, the account would have 3-day trades available. Under SEC-approved Portfolio Margin rules and using our real-time margin system, our customers are able in certain cases to increase their leverage beyond Reg T margin requirements.

For decades margin requirements for securities stocks, options and single stock futures accounts have been calculated under a Reg T rules-based policy. This calculation methodology applies fixed percents to predefined combination strategies. With Portfolio Margin, margin requirements are determined using a "risk-based" pricing model that calculates the largest potential loss of all positions in a product class or group across a range of underlying prices and volatilities.

However, Portfolio Margin compliance is updated by us throughout the day based on the real-time price of the equity positions in the Portfolio Margin account. Please note, at this time, Portfolio Margin is not available for U. Portfolio or risk based margin has been utilized for many years in both commodities and many non-U. Dependent upon the composition of the trading account, Portfolio Margin may require a lower margin than that required under Reg T rules, which translates to greater leverage.

Trading with greater leverage involves greater risk of loss. There is also the possibility that, given a specific portfolio composed of positions considered as having higher risk, the requirement under Portfolio Margin may be higher than the requirement under Reg T. Part of the reasoning behind the creation of Portfolio Margin is that the margin requirements would more accurately reflect the actual risk of the positions in an account.

Thus, it is possible that, in a highly concentrated account, a Portfolio Margin approach may result in higher margin requirements than under Reg T. One of the main goals of Portfolio Margin is to reflect the lower risk inherent in a balanced portfolio of hedged positions.

Conversely, Portfolio Margin must assess proportionately larger margin for accounts with positions which represent a concentration in a relatively small number of stocks. Under Portfolio Margin, trading accounts are broken into three component groups: Class groups, which are all positions with the same underlying; Product groups, which are closely related classes; and Portfolio groups, which are closely related products.

The portfolio margin calculation begins at the lowest level, the class. All positions with the same class are grouped and stressed underlying price and implied volatility are changed together with the following parameters:. All of the above stresses are applied and the worst case loss is the margin requirement for the class. Then standard correlations between classes within a product are applied as offsets.

Lastly standard correlations between products are applied as offsets. For stocks and Single Stock Futures offsets are only allowed within a class and not between products and portfolios. After all the offsets are taken into account all the worst case losses are combined and this number is the margin requirement for the account.

For a complete list of products and offsets, see the Appendix-Product Groups and Stress Parameters section at the end of this document. Our real-time, intra-day margining system enables us to apply the Day Trading Margin Rules to Portfolio Margin accounts based on real-time equity, so Pattern Day Trading Accounts will always be able to trade based on their full, real-time buying power. Because of the complexity of Portfolio Margin calculations it would be extremely difficult to calculate margin requirements manually.

Fixed Income. Mutual Funds. US Metals. You can change your location setting by clicking here. Interactive Brokers Home. US Options Margin Overview. Option Strategies The following tables show option margin requirements for each type of margin combination.

Note: These formulas make use of the functions Maximum x, y,.. Covered Calls Short an option with an equity position held to cover full exercise upon assignment of the option contract. Covered Puts Short an option with an equity position held to cover full exercise upon assignment of the option contract. Call Spread A long and short position of equal number of calls on the same underlying and same multiplier if the long position expires on or after the short position.

Put Spread A long and short position of equal number of puts on the same underlying and same multiplier if the long position expires on or after the short position. Collar Long put and long underlying with short call. Long Call and Put Buy a call and a put. Short Call and Put Sell a call and a put. Long Butterfly Two short options of the same series class, multiplier, strike price, expiration offset by one long option of the same type put or call with a higher strike price and one long option of the same type with a lower strike price.

Short Butterfly Put Two long put options of the same series offset by one short put option with a higher strike price and one short put option with a lower strike price. Short Butterfly Call Two long call options of the same series offset by one short call option with a higher strike price and one short call option with a lower strike price.

Long Box Spread Long call and short put with the same exercise price "buy side" coupled with a long put and short call with the same exercise price "sell side". Short Box Spread Long call and short put with the same exercise price "buy side" coupled with a long put and short call with the same exercise price "sell side". Conversion Long put and long underlying with short call. Reverse Conversion Long call and short underlying with short put. Iron Condor Sell a put, buy put, sell a call, buy a call.

Day Trade : any trade pair wherein a position in a security Stocks, Stock and Index Options, Warrants, T-Bills, Bonds, or Single Stock Futures is increased "opened" and thereafter decreased "closed" within the same trading session. Pattern Day Trader : someone who effects 4 or more Day Trades within a 5 business day period. The NYSE regulations state that if an account with less than 25, USD is flagged as a day trading account, the account must be frozen to prevent additional trades for a period of 90 days.

We have created algorithms to prevent small accounts from being flagged as day trading accounts, to avoid triggering the 90 day freeze. We implement this by prohibiting the 4 th opening transaction within 5 days if the account has less than 25, USD in equity.