How can I check the margin impact of an order before placing it?

Checking the margin impact of an order before placing it is crucial for effective trading and risk management. Margin impact refers to how a potential trade will affect your account's margin requirements. It is important to check margin impact because:

• It helps you understand how much buying power you will have after the trade
• It prevents potential margin calls or forced liquidations
• It allows you to make informed decisions about position sizing and risk management

Interactive Brokers (IBKR) provides a "Check Margin Impact" feature in its trading platforms (TWS, Mosaic, and MobileTrader) to help you preview the margin impact of an order. Here is how to use this feature:

In TWS (Trader Workstation):

1. Create an order or right-click on a Buy or Sell order line
2. Select "Check Margin Impact"
3. View the order details in the "Change" column on the Initial Margin line

In Mosaic:

1. Create the order in the Mosaic Order Entry window
2. Hover your mouse over the small white arrowhead next to "Submit"
3. Move the mouse to "Check margin Impact" and left-click

To preview margin impact when closing a position:

1. Right-click on any data line with a position
2. Go to Contract Info, then click "Show Margin Impact"
3. View details in the "Change" column on the Initial Margin line

Calculating the Margin Rate:

1. Create an order and use the Check Margin Impact feature
2. Look at the Change column value in the Initial Margin line
3. Divide that number by the "Amount" of the order to get the decimal equivalent of the margin percentage

Example: If the Initial Margin change is 6,000 and the total Amount of the order is 24,000, then the margin rate is 0.25 or 25%.

Additional Tips:

• You can use this feature in your Paper Trader account as well
• For futures trades, the process is similar and will show you the current projected margin requirements
• The Risk Navigator can be used to create a simulated portfolio and check margin requirements from a portfolio perspective

The "Check Margin Impact" feature provides accurate information based on your account type, portfolio positions, and other factors, ensuring you have a clear understanding of how the trade will affect your account before placing the order.

Additional Information

• Check Margin Pre-Order in the users' guide.
• Risk Navigator: Alternative Margin Calculator in the Knowledge Base.