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You should upgrade or use an alternative browser. Discussion in ' Retail Brokers ' started by jones , May 10, Log in or Sign up. I'm not sure if this thread belongs here or in the Options forum; nonetheless, here is the "CRAZY" margin requirement imposed by Interactive Brokers This is simply INSANE!!!!!!!!!

The customer service rep stated that because it's the futures market, there may not be any market liquidity for back month contracts, as some futures products are several years out.

I explained that the contract was only 7 months out, not years. To make it even more frustrating the ETF equivalent SPY DO NOT have such burdensome margin requirements for Dec with Portfolio Margin. Does anyone know how to get around this dilemma???? I don't want to open up another account with some other Broker; however, if I have no choice then that's what I will do, unless all Brokers have this ridiculous policy of assessing a margin requirement that's 5 times greater than the potential max loss for back months with 6 to 7 month til expiration No haircut beyond the debit risk and even less under PM-treatment.

Of course there is no logic behind the decision, but you're still receiving SPAN on the ES fly.

I agree and that's why I switched from them some time ago. You will not sway them. If you have a large position that includes deferred month options in soft commodities, you will also find that the margin requirement swings throughout the day because they use a model for deferred options pricing which is often simply wrong.

I think they regard futures options as basically too risky except under tight constraints, and have simply chosen to take a different, more conservative approach from everyone else, even if it means loss of business which I am sure it has meant. Fine, there are others. I doubt that any professional commodity futures options traders are still with IB. I think IB is absolutely great for stocks though.

There is a logic here.

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We do not like non liquid contracts on accounts of our customers. Each firm monitors risk as they feel necessary. Change to an FCM that fits your business. With all due respect, the contract in question is VERY LIQUID, even far month contracts I'm talking about the E-mini, not pork bellies Plus, even if it was a situation of IB worrying about liquidity on contracts 6 months out, then simply set the Initial Margin requirement at the max loss Not 5 times the Max loss It looks very suspicious when IB is going thru such lengths to disallow traders from entering reasonably safe positions It's as if IB knows it is unable to have The Timber Hill group take the other side of the trade!!!!!!

I dont trade options, but to me this is simple risk management IBKR is under no obligation to expose themselves to risk if they so see fit IBKR is not the only shop in town FWIW, bellies were delisted nearly two years ago.

Lumber or orange juice would have been a better comparison. You must log in or sign up to reply here. Your name or email address: Do you already have an account?

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