Margin

IB Share CFDs Margin

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IB Maintenance and Initial Margin Requirements for IB Share CFDs

IB establishes a risk-based margin for each CFD individually, based on the observed historical volatility of the underlying share. Specifically, IB calculates five historical standard deviations to determine the standard maintenance margin, subject to a minimum margin of 10% (without correlation-based off-sets). The resultant margin rates apply position by position. In the vast majority of cases the minimum margin of 10% is applied.

The following house charges may apply in addition to standard margins:

• Large Position Charge - If a position is greater than the equivalent of 0.5% of the market capitalization of a share, a large position charge applies. The required margin grows linearly from the risk-based margin to 100% when the share of market capitalization grows from 0.5% to 2%.
• Short Cheap Stock Charge - A short cheap stock charge is applied for short CFDs on shares with market capitalizations below $500 million. The required margin grows linearly from 30% to 100% as the market capitalization decreases from $500 to $250 million. For market capitalizations between $250 and $100 million, the required margin is 100%, subject to a minimum of $2.50.

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IB Index CFDs Margin

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Maintenance Margin Requirements for Intraday and Overnight

The maintenance margin requirement for IB Index CFDs is:

• The overnight maintenance margin for the related future, adjusted for size.
• Subject to an overall minimum of 5% or 5 historical standard deviations, whichever is greater.
• The resulting requirement is reduced by 50% during the liquid trading hours of the related future. Full maintenance margin-enforcement will begin 15 minutes before the end of liquid hours.