Any open position, including non-base currency, can be closed by IBKR when the account is in a real or projected margin deficit. A Liquidation is done automatically and the Liquidation algorithm decides what to close. Please remember that IBKR's Liquidation system is designed to close positions to reduce margin requirements and ensure the account becomes margin compliant. …
Margin requirements affect how and when you can borrow, the type of deposits which may be required and the level of equity that you must maintain in your account. Failure to meet these requirements will result in becoming subject to liquidation of assets, either automated or manual, to bring the account back into margin compliance. …
We compute the Net Liquidation Value for specific account segments as follows:
Overview
The majority of all liquidations occur due to margin violations. There are two main types of margin violations that apply to margins accounts, Maintenance Margin and Reg. T Margin…
In a cash account, there are several reasons why your funds may not be immediately available for trading:
Assuming the client has met the necessary requirements which consider age, investment objectives and financial qualifications, their account will be assigned margin permissions at the point of application or, if maintaining a cash account and requesting an upgrade to margin, thereafter…
Establishing, and subsequently maintaining, a margin loan requires the following preconditions:
When an account is in a margin deficit, any open position can be liquidated by IBKR to return the account to margin compliance, including currency positions. In addition, IBKR may act to convert non-base currency balances as described in the How can I close out the nominal FOREX positions in my account? …
Overview:
Position liquidations within a cash account generally result from one of the following two situations:…
In an IBKR Cash account, an investor must pay for the purchase of a security meaning, the trade must settle prior to selling that security.
A Broker can have rules that are more restrictive than required by regulators. IBKR's implementation of the free riding rule uses an end of day check to see if a position was closed prior to its trade settlement date. This IBKR end of day surveillance would still consider closing a position before settlement a Free Riding violation and would automatically put the account into "Cash Up Front" restriction for the next 90 days…
Background
Below is a listing of some of the more commonly used margin terms:
Equity with Loan Value (ELV) …
In a cash account, an investor must pay for the purchase of a security (meaning, the trade must settle) prior to selling that security. If an investor buys a security and then sells that same security without paying for the security in full by settlement date, the investor is considered to be “free riding.” Our implementation of the free riding rule uses an end of day check to see if a position was closed prior to its trade settlement date. Our end of day surveillance would still consider closing a position before settlement a Free Riding violation and automatically puts the account into "Cash Up Front" restriction for the next 90 days…
The order rejection "Error 503" message is displayed when your account does not have trading permissions for the product you are trying to trade.
Additional Information…
An account must first have approved US option trading permissions to enter an option order. The type of option strategies available to trade will depend on the level of option permissions approved on the account. The various levels are as follows: |…