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IB int margin 30,000usd on Vix oct 17, rip off


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IB int margin 30,000usd on Vix oct 17, rip off

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  #1 (permalink)
San Diego, USA
 
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Just got off the phone with IB representative. They are now charging $30,000 initial margin for short position in the nearest vix October 2017 future. CFE margin is 6300.

What a rip off. Can anyone advise a broker for trading Vix futures?


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  #2 (permalink)
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Btw, TS initial margin is 2x the regular margin.

What is going on here?!?!


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  #3 (permalink)
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From e.g. the 5/17, 6/29, 8/10, and 8/17 spikes the larger brokers know how many customers cannot
afford the risks of VX and produce(d) liabilities. So they are taking countermeasures.

P.S.: Imho you should interpret such safety actions which also protect (other) customers as a clear pro of solid brokers.

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  #4 (permalink)
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choke35 View Post
From e.g. the 5/17, 6/29, 8/10, and 8/17 spikes the larger brokers know how many customers cannot
afford the risks of VX and produce(d) liabilities. So they are taking countermeasures.

P.S.: Imho you should interpret such safety actions which also protect (other) customers as a clear pro of solid brokers.



I dont think that margin at 3x the face value is reasonable or a sign of solid broker.


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  #5 (permalink)
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alko View Post
I dont think that margin at 3x the face value is reasonable or a sign of solid broker.


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In the case of the above-mentioned spikes tripling the margins would barely have been enough to
prevent customers from blowing up their accounts (with all consequences for the broker and other
customers). Now it's multiplier 4.x compared with the CFE minimum - so what ...

P.S.: If you enter e.g. "vix spikes margin call" at Google and look for articles of the last 2 months you
can see how bothered the industry is about adverse events that surpass such precautions by far.

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  #6 (permalink)
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alko, I would tend to agree with choke35 here. I've used IB for many years and do not know them to be usurious or irresponsible as is implied. This is a protective step, both for them, and their customers.

That said, if you do find another broker that accommodates your margin expectations, it would be wise to perhaps look at reducing ones risk exposure per trade.

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We have received recently a bunch of guys who trade VX where their margin has increased.

One of the platforms that we placed them on is CQG whether CQGM and CQG Trader.
Just in case you guys are looking for a platform, please consider it.

I am not sure why certain brokers have increased margins, but I assume this is a result of a few individuals customers who tend to over-leverage and to address that, they need to create general rules that address and affect everyone.

Right now the attitude towards risk is "What Risk?".

Just my own opinion.

Matt Z
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