The IBKR mobile app allows the investor to view their current margin use as well as show the margin requirement for a particular trade prior to it being submitted. This lesson will explore the various areas margin values are displayed in the IBKR Mobile app. In this video we are assuming a Reg T margin account. However, the tools displayed are identical whether the investor uses a cash account or a Portfolio Margin account. The impact on margin values, however, is likely to be different. Please also note that margin requirements are subject to change as determined by Interactive Brokers as well as by changing market conditions.
Let’s start with a portfolio containing only cash.
- In the Portfolio screen Net Liquidity or Net Liquidation Value which is the total value of all assets marked to market is located in the upper right-hand corner.
- A Margin matrix is located below in the Details area showing key data. These include current Maintenance Margin required to support your portfolio, Excess Liquidity, defined as equity with loan value.
- Maintenance margin, or the amount of excess cash more than the usual requirement in the account.
- SMA, which stands for Special Memorandum Account, which is a line of credit created when the market value of securities in a margin account increases in value.
- Buying Power
This display enables the user to see their portfolio status and leverage at a glance. Without any positions the Margin requirement is zero.
The investor can view the initial long and short and Maintenance long and short Margin requirements of a particular instrument by going to the full Quote details screen and scrolling down to the Margin Requirements area.
When the investor enters an order, in this example for approximately $30,000 USD they can go to the Preview screen to display the Balances section and view the margin matrix.
There are three data columns showing data for Current, Change and Post Trade relating to Equity with Loan, Maintenance, Initial Margin or the minimum amount needed to open a new position, and finally the Position. In this case the investor is buying a specific number of shares and what the estimated margin impact will be. This is a great first reference point to help the investor compare the margin requirement to the nominal value of shares bought. When ready slide the bar to send the order.
The investor is currently using $30,000 of their equity. Using margin, the investor can add a second position of $30,000 to their portfolio. Repeating the steps above for another equity and check the margin on the Preview screen before placing the trade.
Let’s return to the top of the Portfolio screen to see the changes in Maintenance Margin, Excess Liquidity, SMA, and buying power.
Notice the reduced value displayed for Buying Power since the total of the two positions of approximately $60k exceeds the $50k NLV. The investor still has buying power but is now trading with borrowed money from Interactive Brokers.
Having considered equities only to this point, let’s add a commodity futures position to the account and measure the impact. The investor can enter the symbol for crude oil and set up the trade just as they did for stocks earlier. Note the margin requirement on the Order preview page. When ready slide to submit.
To see greater details the investor can go into their Account area and see their balances, margins, and funds for US Securities, US Commodities, or their total portfolio by tapping on the column header.
Tap on the Balances tab to see:
- Net Liquidation Value,
- Net Liquidation Uncertainty, displays the uncertainty associated with after-hours price changes,
- Equity with Loan Value,
- the Previous Day Equity with Loan Value, which only applies to equities and is the marginable equity with loan value as of 1600 ET the previous day
- Securities Gross Position Value, which also only applies to equities and is the sum of the absolute value of long and short stocks and options, [ long stock value + short stock value + long option value + short option value]
- and Cash.
Tapping on the Margins tab shows information for:
- Reg T Margin,
- Current Initial Margin,
- Post Expiry Margin @ Open,
- Current Maintenance Margin
- Projected Look Ahead Initial Margin,
- Projected Look Ahead Maintenance Margin,
- Projected Overnight Initial Margin, and
- Projected Overnight Maintenance Margin.
Remember, for futures positions, the margin requirement is set by the listing exchange.
For stocks, the broker determines the amount of margin deployed, which could be a function of liquidity, market capitalization, how concentrated the positions might be in a specific sector. In either case, Interactive Brokers might charge more than either the futures exchange or other brokers.
Tapping on the Funds tab:
- Buying Power,
- and other details.
Please note that different stocks have different requirements. This is due to several factors, such as market capitalization of the underlying, how volatile is has proven and what sector it fits in to. There are several other factors driving margin requirements, for more information please visit the Interactive Brokers website.
Disclosure: Interactive Brokers
The analysis in this material is provided for information only and is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad-based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation by IBKR to buy, sell or hold such investments. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.
Supporting documentation for any claims and statistical information will be provided upon request.
Any stock, options or futures symbols displayed are for illustrative purposes only and are not intended to portray recommendations.
Disclosure: Margin Trading
Trading on margin is only for sophisticated investors with high risk tolerance. You may lose more than your initial investment.
For additional information regarding margin loan rates, see ibkr.com/interest