A Short Sell order will be accepted and can possibly trade if you have a margin type account and there is sufficient Available Funds to meet any change in the account's margin requirements. If If you do not want the ability to sell short, you would need to have a Cash type account as Cash accounts cannot borrow shares of stock to naked short sell, be short naked Call options or short non-cash secured Put options. Cash accounts are restricted from holding a short balance in any currency as this would also constitute a loan from IBKR.
Is it possible to disable naked short selling as a precaution?
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How do I set a limit on using margin?
When you open a margin account you have the ability to borrow from IBKR. You can not set a limit or a set only a specific amount of margin to use in a margin account. If the account has sufficient Available Funds then a new order would be accepted. There is a calculated margin requirement for positions in a margin type account displayed as an Initial margin and Maintenance margin requirement. In addition to contracts traded in the account any borrowed cash from Forex trading or from trading outside the account’s Base Currency can have a calculated margin requirement. There are tools available so you can monitor your account’s margin requirements and cash balances in real time or as a daily snapshot…
How to sell an option against a long one in the account?
To sell an option against a long option already in a margin type account simply create a sell order and if the account has enough available funds to meet any change in the account's margin requirements the order is accepted. The short option will automatically be margined with other options on the same underlying. …
Can I buy stock on margin in an IRA account?
As the assets in an IRA account are not eligible to be pledged as loan collateral, and stock ordinarily serves as the collateral securing payment of a margin loan, account holders are not permitted to buy stock on margin in either a Cash or Margin type IRA account. All stock purchases must be paid for in full with cash. In addition, other transactions which require a margin account such as shorting stock and selling uncovered options are not allowed in either a Cash or Margin type IRA account…
Can I use proceeds from a short sale to meet a new margin requirement?
You cannot simply use cash received from a short sale to meet the margin requirement for a new order in your account. A short stock sale is a margin transaction in which the account holder is borrowing stock rather than cash. While the proceeds from the short sale are credited to the cash balance of the account, these funds must be posted with the lender of the shares as collateral to secure their return. As a result, and in recognition of the fact that the loan transaction is subject to its own financing terms, the cash collateralizing the loan is excluded for the purpose of determining whether a margin loan exists…