Stock Margin Requirements
Stocks Margin Overview
US Stocks Margin Requirements
For residents of Hong Kong trading stocks:
- Portfolio margin
The complete margin requirement details are listed in the sections below.
Risk Margin Mechanics
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. Examples of classes would include IBM, SPX, and OEX. A product example would be a Broad Based Index composed of SPX, OEX, etc. A portfolio could include such products as Broad Based Indices, Growth Indices, Small Cap Indices, and FINRA Indices.
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:
- A standardized stress of the underlying.
- For stock, equity options, narrow based indices and single stock futures, the stress parameter is plus or minus 15%, with eight other points within that range.
- For U.S. market small caps and FINRA market indices the stress parameter is plus 10%, minus 10% as well as eight other points in-between.
- For Broad Based Indices and Growth indices the stress parameter is plus 6%, minus 8% as well as eight other points in-between.
- A market-based stress of the underlying based on historical moves in Bloomberg pricing data.
- For Broad Based Indices the implied volatility factor is increased 75% and decreased by 75%.
- For all other classes, the implied volatility for each options class is increased by 150% and decreased by 150%
In addition to the stress parameters above the following minimums will also be applied:
- Classes with large single concentrations will have a margin requirement of 30% applied to the concentrated position.
- A $0.375 multiplied by the index per contract minimum is computed.
- The same special margin requirements for OTCBB, Pink Sheet and low cap stocks that apply under Reg T, will still apply under Portfolio Margin.
- Initial margin will be 110% of Maintenance Margin.
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. As an example, within the Broad Based Index product 90% offset is allowed between SPX and OEX. Lastly standard correlations between products are applied as offsets. An example would be a 50% offset between Broad Based Indices and Small Cap Indices. 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. We encourage those interested in Portfolio Margin to use our TWS Portfolio Margin Demo to understand the impact of Portfolio Margin requirement under different scenarios.
Click here for the OCC's published list of Product Groups and Offset Parameters.
Additional US Margin Requirements
For Residents of Hong Kong:
Use the following links to view other margin requirements:
You can change your location setting by clicking here
Disclosures
- For Leveraged ETFs, Minimum(50% * Leverage Factor, 100%)
- All Margin accounts must have a minimum of USD 2,000 to trade.
- Margin requirements quoted in US dollars may also be satisfied with a Non-US Dollar equivalent.
- We have additional algorithms which increase the nominal margin for positions that represent a > 1% holding of an individual company's shares outstanding, with full margin required for concentrations of > = 5% of a company's shares outstanding. Investors should be prepared to meet the increased margin, where holdings are above 1% threshold.
- Interactive Brokers Australia currently offers margin lending to all clients EXCEPT Self- managed Superannuation Fund account holders ("SMSF"). Click here for more information. For clients of Interactive Brokers Australia who are classified as retail, margin loans will be capped at AUD 50,000 (subject to change in IBKR Australia’s sole discretion). Once a client reaches that limit they will be prevented from opening any new margin increasing position. However, how much a client can borrow depends on a number of factors, including: the value of the money or assets contributed by the client as security; which financial products the client chooses to invest in, as we lend different amounts for different products under our risk-based model; and the maintenance margin requirement for the client’s portfolio. Once a client reaches their borrowing limit they will be prevented from opening any new margin increasing position. Closing or margin-reducing trades will be allowed. Refer to this link for information regarding margin accounts offered by IBKR Australia.