Can I set a maximum dollar exposure for my account?

Unless an account holds solely long stock, bond, option or forex positions which have been paid for in full (i.e., no margin) and/or contains limited risk derivative positions such as option spreads, it is at risk of losing more than the original investment.

In the case of portfolios where the risk is indeterminable, there is no mechanism whereby the account holder can specify, at the portfolio level, a maximum dollar threshold of losses which, if reached, would limit their liability. IB does, however, provide a variety of tools and settings designed to assist account holders with managing and monitoring their exposure, including specialized order types, alerts and the Risk Navigator. A brief overview of each is provided below:

Order Types

Account holders may manage exposure on an individual trade level through several order types designed to limit risk. These order types include, but are not limited to: Stop, Adjustable Stop, Stop Limit, Trailing Stop and Trailing Stop Limit Orders. All of these order types allow you to specify an exit level for your individual positions based on your risk tolerance. For example, an account holder long 200 shares of hypothetical stock XYZ at an average price of $20.00 seeking to limit their loss to $500.00 could create a Stop Limit order having a Stop Price of $18.00 (the price at which a limit sell order is triggered) and a Limit Price of $17.50 (the lowest price at which the shares would be sold).  It's important to note, however, that while a Stop Limit eliminates the price risk associated with a Stop order where the execution price is not guaranteed, it exposes the account holder to the risk that the order may never be filled even if the Stop Price is reached.  For instructions on creating a Stop Limit order, click here.

 

Alerts

Alerts provide account holders the ability to specify events or conditions which, if met, trigger an action. The conditions can be based on time, trades that occur in the account, price levels, trade volume, or a margin cushion. For example, if the account holder wanted to be notified if their account was nearing a margin deficiency and forced liquidation, an alert could be set up to send an email if the margin cushion fell to some desired percentage, say 10% of equity. The action may consist of an email or text notification or the triggering of a risk reducing trade. For instructions on creating an Alert, click here.

Risk Navigator

The Risk Navigator is a real-time market risk management platform contained within the TraderWorkstation, which provides the account holder with the ability to create 'what-if' scenarios to measure exposure given user-defined changes to positions, prices, date and volatility variables which may impact their risk profile. For information on using an Risk Navigator, click here.

List of Chinese Stocks Subject to Increased Margin Requirements

Übersicht: 

As a result of elevated risk concerns, the list of stocks below are subject to an increased 'house' margin requirement of 100% (i.e. no loan value). Note that this list may be subject to periodic updates.

 

ISSUER NAME   SYMBOL   PRIMARY LISTING EXCHANGE
3SBIO INC-ADR  SSRX  NASDAQ
AAA ENERGY INC  AAV  FWB
ABRA MINING LTD AII ASX
ACORN INTERNATIONAL INC-ADR  ATV  NYSE
ACTIONS SEMICONDUCTOR CO-ADR  ACTS  NASDAQ
AGRIA CORP - ADR  GRO  NYSE
AIRMEDIA GROUP INC-ADR  AMCN  NASDAQ
AIRTAC INTERNATIONAL GROUP  1590 TAI
AMBOW EDUCATION HOLDING-ADR  AMBO  NYSE
ANDATEE CHINA MARINE FUEL SE  AF0  SWB
ANDATEE CHINA MARINE FUEL SE  AMCF  NASDAQ
APOLLO SOLAR ENERGY INC  FXA  SWB
A-POWER ENERGY GENERATION  APWR  NASDAQ
A-POWER ENERGY GENERATION  4OS  FWB
ASIAINFO-LINKAGE INC ASIA NASDAQ
ASIAINFO-LINKAGE INC  AFB  IBIS
ATA INC-ADR  ATAI  NASDAQ
BCD SEMICONDUCTOR MANUFA-ADR  BCDS  NASDAQ
BIOSTAR PHARMACEUTICALS INC  7BN  SWB
BIOSTAR PHARMACEUTICALS INC  BSPM  NASDAQ
BITAUTO HOLDINGS LTD-ADR  BITA  NYSE
BODISEN BIOTECH INC  DZ9  FWB
BOHAI PHARMACEUTICALS GROUP  3B2  SWB
BONA FILM GROUP LTD-SPON ADR  BONA  NASDAQ
BOYUAN CONSTRUCTION GROUP IN  BOY  TSE
CAMELOT INFORMATION SYS-ADS CIS NYSE
CHANGYOU.COM LTD-ADR  CYOU  NASDAQ
CHARM COMMUNICATIONS INC-ADR  CHRM  NASDAQ
CHEMSPEC INTL LTD - ADR  CPC  NYSE
CHINA 3C GROUP  GXS  SWB
CHINA BAK BATTERY INC  B6J  FWB
CHINA BAK BATTERY INC  CBAK  NASDAQ
CHINA CABLECOM HOLDINGS LTD  CCUN  IBIS
CHINA CABLECOM HOLDINGS LTD  CABL  NASDAQ
CHINA CENTURY DRAGON MEDIA I  ZDR  SWB
CHINA CERAMICS CO LTD  CCCLU  NASDAQ
CHINA CERAMICS CO LTD  C9E  SWB
CHINA CGAME INC  CA6N  IBIS
CHINA CGAME INC  CCGM  NASDAQ
CHINA DASHENG BIOTECHNOLOGY  16D  FWB
CHINA DIGITAL TV HOLDING-ADR  STV  NYSE
CHINA DISTANCE EDUCATION-ADR  DL  NYSE
CHINA ENERGY CORP  ZCE  SWB
CHINA ENERGY RECOVERY INC CNI FWB
CHINA FINANCE ONLINE CO-ADR  JRJC  NASDAQ
CHINA GENGSHENG MINERALS INC  CGS  FWB
CHINA GRENTECH CORP LTD-ADR  GRRF  NASDAQ
CHINA INDUSTRIAL WASTE MANAG GD9 TIQSSWB
CHINA KANGTAI CACTUS BIO-TEC IWN1 FWB
CHINA LINEN TEXTILE INDUSTRY C60 SWB
CHINA MASS MEDIA CORP-ADR  CMM  NYSE
CHINA MEDICAL TECH-SPON ADR  CMED  NASDAQ
CHINA MEDICINE CORP  XM2  SWB
CHINA NEPSTAR CHAIN DRUG-ADR  NPD  NYSE
CHINA NUOKANG BIO-PH-SP ADR  NKBP  NASDAQ
CHINA ORGANIC AGRICULTURE IN  4CA  FWB
CHINA POWER EQUIPMENT INC  5XP  TIQSSWB
CHINA REDSTONE GROUP INC RS0 SWB
CHINA RITAR POWER CORP  YXC  SWB
CHINA RUNJI CEMENT INC WRJ SWB
CHINA SHENGDA PACKAGING GROU  0CH  FWB
CHINA SHENGDA PACKAGING GROU  CPGI  NASDAQ
CHINA SHENGHUO PHARMACEUTICA  54C  IBIS
CHINA SHENGHUO PHARMACEUTICA  KUN  AMEX
CHINA SHUANGJI CEMENT LTD  C99N  FWB
CHINA SOLAR & CLEAN ENERGY S NCS2 FWB
CHINA SUN GROUP HIGH-TECH CO BP7 FWB
CHINA SUNERGY CO LTD-ADR  CSUN  NASDAQ
CHINA TECHFAITH WIRELESS-ADR  CNTF  NASDAQ
CHINA TMK BATTERY SYSTEMS IN T35 SWB
CHINA WATER GROUP INC  DI1  FWB
CHINA XD PLASTICS CO LTD  02Y  FWB
CHINA XINIYA FASHIO-SPON ADR  XNY  NYSE
CHINA ZENIX AUTO INTERNA-ADR  ZX  NYSE
CHINACACHE INTERNAT-SPON ADR  CCIH  NASDAQ
CHINAEDU CORP-ADR  CEDU  NASDAQ
CLEANTECH SOLUTIONS INTERNAT CLNT NASDAQ
CLEANTECH SOLUTIONS INTERNAT CWZN FWB
CNINSURE INC-ADR CISG NASDAQ
CONCORD MEDICAL - SPON ADR  CCM  NYSE
COUNTRY STYLE COOKI-SPON ADR  CCSC  NYSE
DAQO NEW ENERGY CORP-ADR  DQ  NYSE
DEHAIER MEDICAL SYSTEMS LTD  J8D  FWB
DEHAIER MEDICAL SYSTEMS LTD  DHRM  NASDAQ
DUOYUAN PRINTING INC DPT FWB
EASTERN ENVIRONMENT SOLUTION V5E SWB
E-COMMERCE CHINA-SPON ADR  DANG  NYSE
EFUTURE INFORMATION TECHNOLO  4EF  FWB
ELONG INC-SPONSORED ADR  LONG  NASDAQ
ETERNAL TECHNOLOGIES GROUP  ETO  FWB
FORLINK SOFTWARE CORP  YNO1  FWB
FUNTALK CHINA HOLDINGS LTD  FTLK  NASDAQ
FUQI INTERNATIONAL INC 3F6A IBIS
FUWEI FILMS HOLDINGS CO LTD  F4B  IBIS
GC CHINA TURBINE CORP 7GC SWB
GLG LIFE TECH CORPORATION  GLG  TSE
GLOBAL EDUCATION & TECH-ADR  GEDU  NASDAQ
GOLD HORSE INTERNATIONAL INC 0GH SWB
GUSHAN ENVIRONMENTAL ENE-ADR  GU  NYSE
HANGFENG EVERGREEN INC  HF  TSE
HARTCOURT COMPANIES INC  HCT  SWB
HIGHPOWER INTERNATIONAL INC  HKN  SWB
HIGHPOWER INTERNATIONAL INC  HPJ  NASDAQ
HISOFT TECHNOLOGY INT-ADR  HSFT  NASDAQ
HOLLYSYS AUTOMATION TECHNOLO  46H  FWB
HOLLYSYS AUTOMATION TECHNOLO  HOLI  NASDAQ
IFM INVESTMENTS LTD-ADS  CTC  NYSE
ITONIS INC  IX2  IBIS
JA SOLAR HOLDINGS CO LTD-ADR JASO NASDAQ
JADE ART GROUP INC JAC SWB
JIAYUAN.COM INTERNATIONA-ADR  DATE  NASDAQ
JINGWEI INTERNATIONAL LTD  WJI  SWB
JINKOSOLAR HOLDING CO-ADR JKS NYSE
JINPAN INTERNATIONAL LTD  3QN  FWB
JINPAN INTERNATIONAL LTD  JST  NASDAQ
KANDI TECHNOLOGIES CORP  K8A  FWB
KINGTONE WIRELESSINFO SO-ADR  KONE  NASDAQ
KU6 MEDIA CO LTD-SPN ADR  KUTV  NASDAQ
LDK SOLAR CO LTD -ADR LDK NYSE
LEGEND MEDIA INC LM2 SWB
LENTUO INTERNATI-SPON ADS  LAS  NYSE
LINKWELL CORP  LHX  SWB
LIZHAN ENVIRONMENTAL CORP  LZEN  NASDAQ
MECOX LANE LTD-ADR  MCOX  NASDAQ
MIGAO CORPORATION  MGO  TSE
MINCO SILVER CORPORATION  MSV  TSE
MINDRAY MEDICAL INTL LTD-ADR MR NYSE
NETQIN MOBILE INC - ADR  NQ  NYSE
NEW DRAGON ASIA CORP  BQ4  IBIS
NOAH EDUCATION HOLDINGS-ADR  NED  NYSE
ORIGIN AGRITECH LTD  39O  SWB
ORIGIN AGRITECH LTD  SEED  NASDAQ
ORSUS XELENT TECHNOLOGIES IN  O5X  FWB
ORSUS XELENT TECHNOLOGIES IN  ORS  AMEX
OSSEN INNOVATION CO-SPON ADR  OSN  NASDAQ
PHOENIX NEW MEDIA LTD -ADS  FENG  NYSE
PRIME ACQUISITION CORP  PACQ  NASDAQ
PRIME ACQUISITION CORP  PACQU  NASDAQ
QIAO XING MOBILE COMMUNICATI  F2A  IBIS
QIAO XING MOBILE COMMUNICATI  QXM  NYSE
QIAO XING UNIVERSAL RESOURCE  QXU  FWB
QIAO XING UNIVERSAL RESOURCE  XING  NASDAQ
RDA MICROELECTRON-SPON ADR  RDA  NASDAQ
RECON TECHNOLOGY LTD HRC FWB
RECON TECHNOLOGY LTD  RCON  NASDAQ
RENESOLA LTD-ADR SOL NYSE
SANCON RESOURCES RECOVERY IN FTVA SWB
SEARCHMEDIA HOLDINGS LTD  IDI  AMEX
SEARCHMEDIA HOLDINGS LTD-UTS  IDI U  AMEX
SGOCO GROUP LTD  SGOC  NASDAQ
SHANGPHARMA CORP-ADR  SHP  NYSE
SHENGTAI PHARMACEUTICAL INC ESZ SWB
SINA CORP  YIN  FWB
SINO GAS & ENERGY HOLDINGS L  SEH  ASX
SINO GAS INTERNATIONAL HOLDI QGS SWB
SINOBIOMED INC  G8U  FWB
SINOHUB INC  7S3  FWB
SINOTECH ENERGY LTD-SPON ADR  CTE  NASDAQ
SINOVAC BIOTECH LTD  SVQ  FWB
SINOVAC BIOTECH LTD  SVA  NASDAQ
SKY DIGITAL STORES CORP  YN3  FWB
SKY-MOBI LTD-SP ADR  MOBI  NASDAQ
SKYSTAR BIO-PHARMACEUTICAL  GNJC  FWB
SOHU.COM INC  XOU  FWB
SUNTECH POWER HOLDINGS-ADR STP NYSE
SYSWIN INC-SPON ADS  SYSW  NYSE
TAL EDUCATION GROUP- ADR  XRS  NYSE
TAOMEE HOLDINGS LTD-SP ADR TAOM NYSE
TELESTONE TECHNOLOGIES CORP  MSOA  FWB
THE9 LTD-ADR  NCTY  NASDAQ
TIANLI AGRITECH INC  7TA  FWB
TIANLI AGRITECH INC  OINK  NASDAQ
TIBET PHARMACEUTICALS INC  TXP  SWB
TIBET PHARMACEUTICALS INC  TBET  NASDAQ
TRINA SOLAR LTD-SPON ADR TSL NYSE
TRI-TECH HOLDING INC  TTW  FWB
TRI-TECH HOLDING INC  TRIT  NASDAQ
TRUNKBOW INTERNATIONAL HOLDI  TBJ  IBIS
TRUNKBOW INTERNATIONAL HOLDI  TBOW  NASDAQ
U.S. CHINA MINING GROUP INC RJ2B SWB
UTSTARCOM INC  UTS  FWB
UTSTARCOM INC  UTSI  NASDAQ
UTSTARCOM INC  UTSI  MEXI
VIMICRO INTERNATIONAL CO-ADR  VIMC  NASDAQ
VISIONCHINA MEDIA INC-ADR  VISN  NASDAQ
WSP HOLDINGS LTD-ADR  WH  NYSE
XINHUA CHINA LTD  X5R  IBIS
XINYINHAI TECHNOLOGY LTD 3XI SWB
XINYUAN REAL ESTATE CO L-ADR  XIN  NYSE
YAYI INTERNATIONAL INC  8YJ  SWB
YINGLI GREEN ENERGY HOLD-ADR YGE NYSE
YOUKU.COM INC-SPON ADR YOKU NYSE
YUCHENG TECHNOLOGIES LTD  YCT  SWB
YUCHENG TECHNOLOGIES LTD  YTEC  NASDAQ
ZHENG HE GLOBAL CAPITAL LTD  ZHE  ASX
ZHONGPIN INC  CWP  FWB
ZOOM TECHNOLOGIES INC  ZT2A  FWB
ZUOAN FASHION LTD-SPON ADR  ZA  NYSE

List of Reverse-Merger Stocks Subject to Increased Margin Requirements

The below list of securities represent companies formed via a method known as a reverse merger which, as a result of elevated risk concerns, are subject to a 100% margin requirement. Note that this list is subject to periodic revision reflecting updates to the list of securities included and/or their margin rate.
 
Symbol Company Name
ABV ADVANCED BATTERY TECHNOLOGIE
ABAT Advanced Battery Technology
FEED Agfeed Industries
4AG AGFEED INDUSTRIES INC
ALN American Lorain
A50 AMERICAN LORAIN CORP
RXZ AMERICAN ORIENTAL BIOENGINEE
AOB American Oriental Bioengineering
5CA AOXING PHARMACEUTICAL CO INC
AXN Aoxing Pharmaceuticals
AUTC Autochina International LTD
CADC China ACM
V39 CHINA ADVANCED CONSTRUCTION MA
CAGC China Agritech
4CN1 CHINA AGRITECH INC
CNAM China Armco Metals
CNAM China Armco Metals
X7C CHINA ARMCO METALS INC
CAAS China Automotive Systems
RYV CHINA AUTOMOTIVE SYSTEMS INC
CBPO China Biologic Products
0CB CHINA BIOLOGIC PRODUCTS INC
CBP China Botanic Pharmaceutical
ENF2 CHINA BOTANIC PHARMACEUTICAL I
CDM China Century Dragon Media
CCCL  China Ceramics Co.
CDII China Direct Industries
CH4A CHINA DIRECT INDUSTRIES INC
CEU China Education Alliance
FCPA CHINA EDUCATION ALLIANCE INC
FCPA CHINA EDUCATION ALLIANCE INC
ZTE CHINA ELECTRIC MOTOR INC
CELM China Electric Motors
CFSG China Fire & Security
CFG CHINA FIRE & SECURITY GROUP IN
CGA China Green Agcriculture Inc
GR0 CHINA GREEN AGRICULTURE INC
HGSH China HGS Real Estate
CHLN China Housing & Land Dev
4CL CHINA HOUSING & LAND DEVELOPME
CHC China Hydroelectric
CNIT China Information Technology
02C CHINA INFORMATION TECHNOLOGY I
CIIC China Infrastructure
C74 CHINA INFRASTRUCTURE INVESTMEN
CBEH China Integrated Energy
7C1 CHINA INTEGRATED ENERGYINC
CIL China Intelligent Lighting
4I6 CHINA INTELLIGENT LIGHTING &
CJJD China Jo-Jo Drugstores
CJJD China Jo-Jo Drugstores
04CN CHINA JO-JO DRUGSTORES INC
CMFO China Marine Food
ZMF CHINA MARINE FOOD GROUP LTD
6CE CHINA MEDIAEXPRESS HOLDINGS IN
CCME China MediaExpress Holdings Inc
CHNG China Natural Gas
C7IN CHINA NATURAL GAS INC
BORN China New Borun
NEP China North East Petroleum
53C CHINA NORTH EAST PETROLEUM H
CNGL China Nutrifruit
3NF CHINA NUTRIFRUIT GROUP LTD
G60 CHINA OPPORTUNITY ACQUISITIO
CHOP China Opportunity Acquisition
CPHI China Pharma Holdings
XQJ CHINA PHARMA HOLDINGS INC
CPSL China Precision Steel
3CP CHINA PRECISION STEEL INC
CREG China Recycling Energy
CR9 CHINA RECYCLING ENERGY CORP
C7M CHINA SECURITY & SURVEILLANC
CSR China Security & Surveillance
SHZ China Shen Zhou Mining
SZM CHINA SHEN ZHOU MINING & RESOU
CSKI China Sky One Medical
CH2 CHINA SKY ONE MEDICAL INC
CTFO China TransInfo Technology
ITC CHINA TRANSINFO TECHNOLOGY COR
CVVT China Valves Technology
ICXN CHINA VALVES TECHNOLOGY INC
CWS China Wind Systems
CWZN CHINA WIND SYSTEMS INC
CNYD China Yida Holding
8CY CHINA YIDA HOLDINGS CO
CHBT China-Biotics
D8R CHINA-BIOTICS INC
CAST ChinaCast Education
CNET ChinaNet Online
C5N CHINANET ONLINE HOLDINGS INC
6TC CLEANTECH INNOVATIONS INC
CTEK CleanTech Innovations Inc
COGO Cogo Group
3QM COGO GROUP INC
DEER Deer Consumer Products
D11 DEER CONSUMER PRODUCTS INC
DGW Duoyuan Global Water
ADY Feihe International
4AD FEIHE INTERNATIONAL INC
F4U FUSHI COPPERWELD INC
FSIN Fushi Copperweld Inc
GSI General Steel Holdings
3GL GENERAL STEEL HOLDINGS INC
GPRC Guanwei Recycling
7GF GUANWEI RECYCLING CORP
GFRE Gulf Resources
R29A GULF RESOURCES INC
HRBN Harbin Electric
X9O HARBIN ELECTRIC INC
HQS HQ Sustainable Maritime
QHP HQ SUSTAINABLE MARITIME INDU
JGBO Jiangbo Pharmaceuticals
GNY1 JIANGBO PHARMACEUTICALS INC
KEYP Keyuan Petrochemicals
KGJI Kingold Jewelry
7KJ KINGOLD JEWELRY INC
7LM L&L ENERGY INC
LLEN L&L Energy Inc
LIWA Lihua International
J7L LIHUA INTERNATIONAL INC
LPH Longwei Petroleum
3LI LONGWEI PETROLEUM INVESTMENT
LTUS Lotus Pharmaceuticals
IYM LOTUS PHARMACEUTICALS INC
NEWN New Energy Systems
C1KN NEW ENERGY SYSTEMS GROUP
63NN NF ENERGY SAVING CORP OF AMERI
NFEC NF Energy Savings
N0I NIVS INTELLIMEDIA TECHNOLOGY
NIV NIVS IntelliMedia Technology
ONP Orient Paper
UOPN ORIENT PAPER INC
PUDA Puda Coal
P631 PUDA COAL INC
QKLS QKL Stores
71Q QKL STORES INC
RINO RINO International
R28 RINO INTERNATIONAL CORP
SDTH ShengdaTech
3SG SHENGDATECH INC
VALV Shengkai Innovations
SKU SHENGKAI INNOVATIONS INC
BEST Shiner International
S80 SHINER INTERNATIONAL INC
SCEI Sino Clean Energy
SVL SINO CLEAN ENERGY INC
SCOK SinoCoking Coal
SPU SkyPeople Fruit Juice
P9F SKYPEOPLE FRUIT JUICE INC
SKBI Skystar Bio-Pharmaceutical
HEAT SmartHeat
S2T SMARTHEAT INC
SOKF SOKO Fitness & Spa
3SK SOKO FITNESS & SPA GROUP INC
SORL SORL Auto Parts
A9S SORL AUTO PARTS INC
SBAY Subaye
TQF1 SUBAYE INC
SUTR Sutor Technology
5BF SUTOR TECHONOLOGY GROUP LTD
SYUT Synutra International
ITO SYNUTRA INTERNATIONAL INC
THTI THT Heat Transfer Tech
TPI Tianyin Pharmaceutical
60T TIANYIN PHARMACEUTICAL CO INC
TBV Tiens Biotech
UTA Universal Travel Group
VOA1 UNIVERSAL TRAVEL GROUP
WWIN Winner Medical Group
3LW WINNER MEDICAL GROUP INC
WATG Wonder Auto Technology
WND WONDER AUTO TECHNOLOGY INC
WUHN Wuhan General Group
WG9 WUHAN GENERAL GROUP CHINA INC
YONG Yongye International
2YB YONGYE INTERNATIONAL INC
YUII Yuhe International
YI5 YUHE INTERNATIONAL INC
HOGS Zhongpin
ZSTN ZST Digital Networks
ZS8A ZST DIGITAL NETWORKS INC

India Intra-Day Shorting Risk Disclosure

Interactive Brokers currently offers the ability to short sell stocks before taking delivery on an intra-day basis. In accordance with IB’s intra-day shorting rules, traders are required to deliver shares sold or close short stock positions prior to the end of the trading session. 

Should traders establish a short stock position intra-day and still hold the position ten minutes prior to the end of the trading session at 15:20 IST, Interactive Brokers may, on a best efforts basis, close the position on your behalf. If the position is not closed by the end of the day and the shares are not delivered by the customer before settlement, the loss on account of auction will be borne by the customer. Please note that prices in the auction market are highly variable and typically not favorable compared to the normal market.

It is important to note, IB will not take into consideration any closing orders for short stock positions placed by the customer which may still be working. If your account holds a short position ten minutes prior to the end of the trading session and you have placed working orders to close those positions, there is the possibility your closing order will execute and that IB will act to close out your short position.  In this situation you will be responsible for both executions and will need to manage your long position accordingly.

A fee of INR 1,500 will be charged for this manual processing in addition to any external penalties in the case of short stock positions resulting in auction trades.  As such, we strongly urge customers to monitor their positions and take appropriate action themselves in order to avoid this.

Key Margin Definitions

Übersicht: 

Below is a listing of some of the more commonly used margin terms:

Equity with Loan Value (ELV) – Forms the basis for determining whether a client has the necessary assets to either initiate or maintain security positions. Equals cash + stock value + bond value + mutual fund value + European and Asian options value (excludes market value U.S. securities & futures options and cash maintained in futures segment). 

 
 
Available Funds (ELV – Initial Margin) – equals Equity with Loan Value less the Initial Margin Requirement.
 
 
Excess Liquidity (ELV – Maintenance Margin) – equals Equity with Loan Value less the Maintenance Margin Requirement.
 
 
Initial Margin Requirement - The minimum portion of a new security purchase that an investor must pay for in cash. For U.S. stocks this is defined by Reg. T and is currently 50% (Reg. T Initial Margin). As IB calculates margin on a real-time basis and Reg. T is enforced at the end of the day, IB performs an initial margin requirement check at the point of trade, albeit at a rate generally less than 50% (IB Initial Margin). 
 
 
Maintenance Margin Requirement – the amount of equity which must be maintained in order to continue holding a position. In the U.S., the rules of the listing exchanges specify the maintenance margin requirements on security transactions subject to SEC approval.  The exchange maintenance margin requirement for long stock positions is currently set at 25% although brokers often establish 'house margin' requirements in excess of that, particularly where the security is considered low-priced or subject to volatile price changes.  The exchange maintenance margin requirement for short stock positions is currently set at 30%.
 
 
Net Liquidating Value (NLV) – for a securities account equals total cash value + stock value + securities options value + bond value + fund value. For a commodities account equals total cash value + commodities options value. 
 
Soft Edge Margin (SEM) – if during the trading day an account’s Equity with Loan Value is equal to at least 90% of the maintenance margin requirement, it will not be subject to liquidation until 15:45 ET for U.S. stocks (i.e., the earliest of: 15 minutes before market close, 15 minutes before end of liquidation hours or start of Reg. T enforcement time) at which time the maintenance margin requirement must be met. SEM start time for U.S. stocks is 09:30 ET and for other products the later of: the market open (latest open time if multiply listed); or start of liquidation hours.  

 

Buying Power - the maximum dollar value of securities that you can buy in your account without depositing additional equity.  For a cash account this is equal to the lesser of ELV or Previous Day ELV less the Initial Margin Requirement.  For a margin account this is equal to Available Funds * 4 (reciprocal of the 25% Maintenance Margin Rate)
 
Special Memorandum Account (SMA) – represents neither equity nor cash but rather a line of credit created when the market value of securities in a Reg. T margin account increase in value.  While an increase in market value over original cost creates SMA, a subsequent decline in market value has no effect on SMA.  SMA will only decline if used to purchase securities or withdraw cash and the only restriction with respect to its use is that the additional purchases or withdrawals do not bring the account below the maintenance margin requirement. SMA will also increase on a dollar for dollar basis in the event of cash deposits or dividends.

 

Securities Gross Position Value (GPV) – Absolute value of Long Stock Value + Short Stock Value + Long Option Value + Short Option Value + Long SSF Notional Value + Short SSF Notional Value + Fund Value.

 

Currency Conversion for Trading Products in a Non-Base Currency

How to convert a currency if you wish to trade products in a currency other than the currency your account was initially funded in

For additional information on currency conversions please refer to the Knowledge base articles:

Why Are There Two Currencies Shown When Trading Forex and How Do They Work?

What Happens if I Trade a Product Denominated in a Currency Which I Do Not Hold in My Account?

 

 

Margin oversight for U.S. listed securities & commodities products

The particular regulation which determines the minimum amount of margin collateral that each broker is required to collect from clients transacting in U.S. exchange listed products generally depends upon the following 3 factors:

1. Product Classification - the principal determinant of regulatory oversight is based upon whether the product is classified as a security or commodity. Security products, including stocks, bonds, options and mutual funds are regulated by the Securities and Exchange Commission (SEC).  Commodity products, which include futures contracts and options on futures contracts, are regulated by the Commodities Futures Trading Commission (CFTC).  Single stock futures, a special class of futures contracts, are considered a hybrid product subject to joint regulation by the SEC and CFTC.

In the case of security products, the US central bank referred to as the Federal Reserve (FRB) holds responsibility for regulating the extension of credit by brokers and dealers.  This is accomplished through Regulation T, or Reg T as it is commonly referred, which provides for establishment of a margin account and which imposes the initial margin requirement and payment rules on certain securities transactions.  For example, on stock purchases, Reg T currently requires an initial margin deposit by the client equal to of 50% of the purchase value, allowing the broker to extend credit or finance the remaining 50%.  Reg T does not establish margin requirements for securities options which fall under the jurisdiction of exchange rules (subject to SEC approval).  In addition, the FRB has excluded from Reg T the authority to establish either initial or maintenance margin requirements on securities positions held in a portfolio margining account.  here margin authority resides with the security exchanges whose rules are subject to SEC approval. 

The authority for establishing margin rates on commodity products resides with the listing exchanges, with the exception of broad based stock index futures, for which the FRB has delegated authority to the CFTC.

In the case of single stock futures, margin is set by the listing exchange and subject to SEC approval to the extent the position is carried in a securities account, and subject to an agreement that the margin be equivalent whether held in a securities or commodities account.  Margin for single stock futures are currently set at 20% of the underlying stock value.

2. Initial or Maintenance - initial margin generally refers to the amount of money or its equivalent that the customer must deposit in order to initiate the position and maintenance margin the amount of equity which must be maintained in order to continue holding the position. As noted above, Reg T controls the initial margin requirement on securities transactions.  The rules of the listing exchanges specify the maintenance margin requirements on security transactions subject to SEC approval.  The maintenance margin requirement for long stock positions is currently set at 25% although brokers often establish 'house margin' requirements in excess of that, particularly where the security is considered low-priced or subject to volatile price changes.

Commodities exchanges establish both the initial and maintenance margin requirements for products which they list (subject to provisions for broad based index futures and single stock futures as noted above).

3. Listing Exchange - as noted above, in the case of US securities products the listing exchange has the authority to establish rules for the maintenance margin requirement on positions held in a Reg T margin account and initial and maintenance margin (currently the same) for positions held in a portfolio margin account. Exchange margin rules, however, require prior SEC approval which acts to ensure that margin requirements are set  in a consistent manner across exchanges.  

Subject to the provisions noted above, commodities exchanges maintain authority to establish both initial and maintenance margin requirements.  As a general rule, US commodities exchanges employ the same risk-based margining methodology referred to as SPAN for determining the margin requirement on listed positions with each exchange specifying the relevant SPAN input factors (e.g., Price Scan Range, Volatility Scan Range, Spread Charges, Combined Commodity offsets).

Glossary terms: 

Margin Requirement on Leveraged ETF Products

Leveraged Exchange Traded Funds (ETFs) are a subset of general ETFs and are intended to generate performance in multiples of that of the underlying index or benchmark (e.g. 200%, 300% or greater). In addition certain of these ETFs seek to a generate performance which is not only a multiple of but also the inverse of the underlying index or benchmark (e.g., a short ETF). To accomplish this, these leveraged funds typically include among their holdings derivative instruments such as options, futures or swaps which are intended to provide the desired leverage and/or inverse performance. 

Exchange margin rules seek to recognize the additional leverage and risk associated with these instruments by establishing a margin rate which is commensurate with that level of leverage (but not to exceed 100% of the ETF value). Thus, for example, whereas the base strategy-based maintenance margin requirement for a non-leveraged long ETF is set at 25% and a short non-leveraged ETF at 30%, examples of the maintenance margin change for leveraged ETFs are as follows:

1. Long an ETF having a 200% leverage factor: 50% (= 2 x 25%) 

2. Short an ETF having a 300% leverage factor: 90% (= 3 x 30%) 

A similar scaling in margin is also in effect for options. For example, the Reg. T maintenance margin requirement for a non-leveraged, short broad based ETF index option is 100% of the option premium plus 15% of the ETF market value, less any out-of-the-money amount (to a minimum of 10% of ETF market value in the case of calls and 10% of the option strike price in the case of puts). In the case where the option underlying is a leveraged ETF, however, the 15% rate is increased by the leverage factor of the ETF. 

In the case of portfolio margin accounts, the effect is similar, with the scan ranges by which the leveraged ETF positions are stress tested increasing by the ETF leverage factor.  See NASD Rule 2520 and NYSE Rule 431 for further details.

Special risk relating to offsets between options and futures

Account holders hedging or offsetting the risk of futures contracts with option contracts are encouraged to pay particular attention to a potential scenario whereby a change in the underlying price may subject the account to a forced liquidation even if the account remains in margin compliance.  This scenario is driven by a fundamental difference in which gains and losses are recognized in futures contracts vs. options contracts coupled with IB's requirement that the commodity segment of one's account maintain a positive cash balance at all times. 

Gains and losses in a futures contract, by design, are settled in cash and IB updates the account holder's cash balance through the TWS on a real-time basis for any changes in the futures contract price.  An option contract is also marked-to-the-market on a real-time basis but this change in value represents an unrealized (i.e., non-cash) profit or loss with the actual cash proceeds not reflected in the account until such time the contract is either sold, exercised or expires.

To illustrate this scenario, assume, for example, at time 'X' a hypothetical portfolio consisting of a credit cash balance of $6,850, 2 short Sep ES futures contracts, 2 Long Sep ES $1,000 strike call options on the futures contract marked at $31.50 each, with the cash index at $1,006.  Also assume that at time 'X+1' the cash index increases by 100 points or approximately 10%.  A snapshot of the account equity and margin balances for each date is reflected in the table below.

Portfolio Time 'X' Time 'X+1' Change
Cash $6,850 ($3,150) ($10,000)
2 Long Sep ES $1,000 Calls* $3,150 $10,300 $7,150
2 Short Sep ES Futures* - - -
Total Equity $10,000 $7,150 ($2,850)
Margin Requirement $2,712 $666 ($2,046)
Margin Excess $7,288 $6,484 ($804)

*Note: the contract multiplier for the ES future and option is 50.

As reflected in the table above, the projected effect of this market move would be to decrease the cash balance to a deficit level based upon the mark-to-market or variation on the futures contracts of $10,000 (100 * 50 * 2). While the effect of this upon equity would be largely offset by a $7,150 increase in the market value of the long calls, the unrealized gain on the options has no effect upon cash until such time they are either sold, exercised or expire.  In this instance, IB would act to liquidate positions in an amount sufficient to eliminate the cash deficit while maintaining margin compliance and attempting to preserve the greatest level of account equity.

While hypothetical in nature, this sample portfolio is intended to be illustrative of the liquidity risk associated with any portfolio containing futures and long options where the funding of any variation on the futures position must be supported by available cash or buying power from the securities segment of the account and not unrealized option gains.

Mutual Offset System

A special arrangement between CME Group and the Singapore Exchange (SGX), referred to as the Mutual Offset System (MOS), allows traders of both the Yen and USD denominated Nikkei 225 futures to take positions in the products at one exchange and offset them at the other one.  The effect of this arrangement is to create one marketplace crossing different time zones as well as fungibility of contracts between the exchanges.

IB account holders may avail themselves of the MOS functionality by specifying at the point of trade entry both the proper underlying symbol and exchange.  In the case of the Yen Denominated Nikkei 225 Index contract the IB underlying symbol is 'NIY' and the exchange either 'Globex' (for contracts listed at and trading during CME hours) or 'SGXCME' (for contracts listed at and trading during SGX hours).  In the case of the USD Denominated Nikkei 225 Index contract the IB underlying symbol is 'NKD' and the exchange either 'Globex' (for contracts listed at the CME) or 'SGXCME' (for contracts listed at the SGX).

To illustrate the concept of fungibility, were an account holder to enter into a long futures position on the CME exchange and thereafter enter into a short futures position having the same underlying symbol and expiration date but listed on the SGXCME exchange, the effect would be the same as if that short position was executed on the CME exchange and that is to close the long position. 

MOS also provides margin offset for positions entered into on either of the two exchanges in the manner noted above.  Here, for example, a long futures position entered into from the CME exchange would be afforded spread margin treatment against a short position having the same underlying but a different expiration month which was entered into from the the SGXCME exchange. This effect is intended to be similar to that which would take place if both the long and short position were entered into from the same exchange.

IMPORTANT NOTE

IB also offers trading in the identical SGX-listed futures contracts but without the MOS features of fungibility and margin offset as outlined above. In the case of the Yen Denominated Nikkei 225 Index, the contract having the underlying symbol 'SGXNK' and exchange of SGX is the functional equivalent of the 'NIY' contract having the exchange of SGXCME.  Similarly, in the case of the USD Denominated Nikkei 225 Index, the contract having the underlying symbol 'N225U' and exchange of SGX is the functional equivalent of the 'NKD' contract having the exchange of SGXCME. It should be noted, however, that a long (short) position of a given expiration entered into on SGX exchange will not close out a short (long) position entered into on the SGXCME, or the CME for that matter.  In addition, there is no margin offset provided between SGX-listed and SGXCME or CME contracts.

A table of trading hours for the MOS eligible products is provided below:

Symbol Description Exchange Trading Hours (ET)*
NIY Yen Denominated Nikkei 225 Index Globex

Mon-Fri 16:30 - 16:15 the next day (closing at 15:15 Friday);

Daily maintenance shutdown 17:30 - 18:00

NIY Yen Denominated Nikkei 225 Index SGXCME Mon - Fri 18:30 - 01:30
NKD USD Denominated Nikkei 225 Index Globex Mon-Fri 03:00 - 16:15; 16:30 - 17:30 & 18:00 - 19:00
NKD USD Denominated Nikkei 225 Index SGXCME  Mon - Fri 02:15 - 09:55 & 18:30 - 01:30

 *Please refer to the respective websites of each exchange for adjustments which take place during periods when US Daylight Savings Time is in effect.

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