IBKR leverage problem

[Christos Krasas 0]

I recently made an account with IBKR. It is an IB-UK margin account which is supposed to have a 4:1 leverage. Everything it is been approved with my account by the way. I have above 25.000k dollars in my account. They do not give me leverage and I am not even able to short my full initial equity of account. I message them and they send me just an article to read. What I have to do? This is a serious problem I need help.

[peterB 327]

you need to switch your account in IB from cash account to margin account

[Paul aka Aurbano 83]

Hi ! IB accounts are by all means far more complicated than openning and direct access to 4:1 leverage. Please have a read to this posts about margin requeriments, margin calculator, infographics and  check specific requeriments for different underlayings :

1. https://www.interactivebrokers.co.uk/en/trading/margin-requirements.php
2. https://www.interactivebrokers.co.uk/en/trading/margin-calculator.php
3. https://www.interactivebrokers.co.uk/en/trading/margin-infographic.php
4. https://www.interactivebrokers.co.uk/en/trading/products-exchanges.php#/

Hope this brings some light with your account !

 

[peterB 327]

it does not bring any light actually. with IB you never get what they promoting you. You can never use your IB BP to 100%. Any proof that it can be done please post here.

[Paul aka Aurbano 83]

You only have to look for the margin requeriment of the ticker you wanna trade. If you don't spend some time doing the research, you will never know. Not all the tickers are equal. Some require 18-20% ... other 100-150%, depending on risk, volatility and many things more.

Here is an example of my account with around 3.2k openning positions above BP:

 

 

Edited November 21, 2024 by Paul aka Aurbano
include screenshot

[peterB 327]

none of those positions were near your BP actually they were 1/2.5 leverage max
3200 is your equity not BP
try to buy 80 shares of NVDA and you will get an error about initial equity requirement. sometimes you get the error for shorting the same position that you were long 10 seconds ago.

Edited November 23, 2024 by peterB

[Paul aka Aurbano 83]

Sorry that I didn't explain myself enough or you didn't get it... Here is the Margin requirement again for $NVDA (in Interactive Brokers). I don't know where you got your calculations for BP, however IB is very clear about all this. Any other broker works exactly like that as every ticker has its own characteristics. $NVDA has an initial 20.16% of margin requeriment and that is what you need to keep in your account AFTER you buy the asset. So far, now you know how to calculate the max BP for $NVDA with your current account equity. Nothing less nothing more. Also attached some more tickers to check differences.

 

[peterB 327]

As you shown above, this differs for each ticker quite a lot, effectively meaning you never know your BP until you manually calculate it. For sure you can NEVER use your full BP with IB. So even if EU citizens get optically bigger leverage it is not such a difference than the rest of the world.

Some other brokers just give you the full BP without the initial margin requirements

[Paul aka Aurbano 83]

General tip for the topic & not saying that max leverage an account is a good practice. We all should agree that as traders, we always need to know what we are doing with our risk management in every step of the process.

That being said: another partial solution into any leverage problems with IB is using Options. 1 contract equals 100 shares and your initial margin won't be that much as you only pay premium in advance. Obviously that this solution has its own caviats such us option chain analisys, knowing what stocks are valid or not for this, checking volume and liquidity, etc. Not valid for every company for sure.