Withdrawable cash in brokerage account

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tymishu
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Location: NJ

Withdrawable cash in brokerage account

Post by tymishu » Tue Feb 13, 2018 12:38 pm

I have a margin account with IB (interactive Brokers). Needless to say I have common stocks which also carry margin debt. I also have cash available for withdrawal which incurs margin interest if I take it out for any reason. I would like to know how the amount of the withdrawable cash is calculated. I seem to remember before moving the assets from Etrade to IB the available cash in the Etrade account was pretty clear how it is calculated. Although I never used it. With IB it is not at all clear to me how the amount is arrived.

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Pajamas
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Re: Withdrawable cash in brokerage account

Post by Pajamas » Tue Feb 13, 2018 12:46 pm

It can be complicated because margin requirements can vary according to initial and maintenance requirements and per security and can change for a particular security and according to market conditions for the security and how overweighted it is in your account. Margin requirements are subject to regulatory and house rules.

https://www.interactivebrokers.com/en/s ... rfunds.htm

https://lnteractivebrokers.com/en/indexfa23.html

https://www.interactivebrokers.com/en/index.php?f=1232

https://www.interactivebrokers.com/en/index.php?f=5168

tymishu
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Location: NJ

Re: Withdrawable cash in brokerage account

Post by tymishu » Tue Feb 13, 2018 2:33 pm

Thanks. Will look into it.

Another thing I found after transferring my positions from Etrade to IB is they have different maintenance margin requirements. At least with the assets I own IB's maintenance margin requirement is lower, 30% in Etrade vs. 25% in IB for one particular stock. This is on top of IB's obscenely low margin rate.

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Pajamas
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Re: Withdrawable cash in brokerage account

Post by Pajamas » Wed Feb 14, 2018 2:22 pm

tymishu wrote:
Tue Feb 13, 2018 2:33 pm
Thanks. Will look into it.

Another thing I found after transferring my positions from Etrade to IB is they have different maintenance margin requirements. At least with the assets I own IB's maintenance margin requirement is lower, 30% in Etrade vs. 25% in IB for one particular stock. This is on top of IB's obscenely low margin rate.
Transfers between brokers can be rejected if the account doesn't meet the receiving broker's margin requirements as-is.

I'm not surprised IB has lower requirements than other firms as it seems like many of the people who get into trouble trading have their accounts at IB.

bawr
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Re: Withdrawable cash in brokerage account

Post by bawr » Wed Feb 14, 2018 3:21 pm

tymishu wrote:
Tue Feb 13, 2018 2:33 pm
Thanks. Will look into it.

Another thing I found after transferring my positions from Etrade to IB is they have different maintenance margin requirements. At least with the assets I own IB's maintenance margin requirement is lower, 30% in Etrade vs. 25% in IB for one particular stock. This is on top of IB's obscenely low margin rate.
If the account has portfolio margin instead of Reg-T margin, the maintenance margin requirement can be as low as 15%, depending on the composition of the portfolio. My IB account's total maintenance margin is currently about 20%.

tymishu
Posts: 24
Joined: Thu Feb 01, 2018 10:49 pm
Location: NJ

Re: Withdrawable cash in brokerage account

Post by tymishu » Wed Feb 14, 2018 4:19 pm

The regular T-margin in my account is 50%. Both the initial margin and maintenance margin are at 25%.

tymishu
Posts: 24
Joined: Thu Feb 01, 2018 10:49 pm
Location: NJ

Re: Withdrawable cash in brokerage account

Post by tymishu » Wed Feb 14, 2018 4:38 pm

Pajamas wrote:
Wed Feb 14, 2018 2:22 pm
Transfers between brokers can be rejected if the account doesn't meet the receiving broker's margin requirements as-is.

I'm not surprised IB has lower requirements than other firms as it seems like many of the people who get into trouble trading have their accounts at IB.
I don't know if more people get into trouble with IB is because of the lower margin requirement. I suspect it is because of the significant lower fees you pay and the extent of customer service associated with those fees.

For instance, Etrade used to call me (the so called designated platinum team representative) occasionally asking me if I am happy with the platinum team service. What service? Etrade is much more friendly if you have a question and called to ask. That much I do know. When you are paying anywhere from 6.5% to 8.75% for your margin loans your broker need to be more friendly I presume.

IB's customer service is good. But it is very no nonsense I learned. I've heard if you are in trouble with your margin loan at IB, you get a notification and 15 minutes later IB takes action unilaterally. I've not gotten in trouble with either with my margin loan so I do not know one way or another. But IB's margin loan rate is just unheard of.

tymishu
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Location: NJ

Re: Withdrawable cash in brokerage account

Post by tymishu » Tue Feb 20, 2018 7:42 pm

bawr wrote:
Wed Feb 14, 2018 3:21 pm
tymishu wrote:
Tue Feb 13, 2018 2:33 pm
Thanks. Will look into it.

Another thing I found after transferring my positions from Etrade to IB is they have different maintenance margin requirements. At least with the assets I own IB's maintenance margin requirement is lower, 30% in Etrade vs. 25% in IB for one particular stock. This is on top of IB's obscenely low margin rate.
If the account has portfolio margin instead of Reg-T margin, the maintenance margin requirement can be as low as 15%, depending on the composition of the portfolio. My IB account's total maintenance margin is currently about 20%.
I applied and have been approved for portfolio margin account. My maintenance margin requirements actually increased. I found it is because of concentration of my position. I wonder should I go back to Reg-T margin account. Or can I?

Shallowpockets
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Re: Withdrawable cash in brokerage account

Post by Shallowpockets » Wed Feb 21, 2018 10:31 am

Margin is debt. Not a BH thing. Using money you don't have. Liable for a margin call.

tymishu
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Joined: Thu Feb 01, 2018 10:49 pm
Location: NJ

Re: Withdrawable cash in brokerage account

Post by tymishu » Wed Feb 21, 2018 4:53 pm

Shallowpockets wrote:
Wed Feb 21, 2018 10:31 am
Margin is debt. Not a BH thing. Using money you don't have. Liable for a margin call.
What is BH?

Do you buy your house with cash? You may fund every purchase with cash on hand. It is your prerogative. Margin loan is no more a debt than the mortgage on your house and no less. You put up the security you own as collateral the same way you put up your house as collateral to get the loan. The loan is susceptible to a margin call the same way your mortgage is susceptible to default. Plus I don't think I have revealed to you what percentage of margin available to me I used to fund the purchase of security in my portfolio.

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