In a Portfolio Margin account, withdrawable cash, also referred to as Available Funds, is an important metric that determines how much money you can withdraw from your account. The calculation for withdrawable cash is straightforward and uses two key components:
- Equity with Loan Value (ELV)
- Initial Margin requirement
The formula to calculate withdrawable cash in a Portfolio Margin account is: Withdrawable cash = Equity with Loan Value (ELV) - Initial Margin requirement
This calculation ensures that you maintain sufficient funds in your account to cover your positions and meet margin requirements while allowing you to access excess funds for withdrawal or further trading activities. The funds available for withdrawal also have to be free from any fund transfer related hold period and any clearing hold period after a closing trade.
Note
- Equity with Loan Value (ELV) represents the total value of your account, including cash and the current market value of your securities, adjusted for any margin loan.
- The Initial Margin requirement is the minimum amount of equity you must maintain in your account based on your current positions and the rules set by Interactive Brokers and regulatory bodies.
- Withdrawable cash can fluctuate throughout the trading day as the value of your positions changes and as you execute new trades.
- If the result of this calculation is negative, it means you don't have any withdrawable cash and may need to deposit funds or reduce your positions to meet margin requirements.