Due to the high leverage and volatility of Bitcoin, the liquidation engine will often choose to be aggressive when liquidating traders.
This results in quick executions, which will limit the number of situations where a profit adjustment is needed.
By automatically liquidating when this level is reached, the trader's risk decreases, and it hopefully prevents the trader from losing more money and being unable to repay the leverage.
Welcome to Interactive Brokers' Understanding Margin Webinar.
$$ Your daily profits and losses (P&L) and daily returns are computed based on changes in your net liquidation value.
For a stock only portfolio, your net liquidation value is also called equity with loan.
Note: SOD = Start of Day Below are the current thresholds: Accounts which start the day with less than ,000 NLV will be unable to place any new opening spreads, or enact any trade in a symbol which will increase existing margin requirements.
Accounts with existing spreads that start the day with less than ,000 NLV will be messaged that there is a restricted position in the account, and they will have, at most, three days (including the day of the message) to eliminate the restriction by taking one, or a combination of, the following actions: Options House Margins Department will take market action on the day following the notice date to liquidate any and all restricted positions.
If a margin account starts the day under the required threshold for a certain strategy (including spreads), that strategy will be considered restricted for that day.
Unfortunately, there is a lot of terminology involved and this note should help you understand all the intricacies involved.
For readers who are impatient, the two most important numbers you need to understand and monitor are the net liquidation value and the SMA.
It also means that there is rarely ever any excess Bitcoin in the insurance fund.
With investor purchases of securities "on margin" averaging more than 6 billion for the first nine months of 2013 (a 27 percent increase over the same period last year), we are re-issuing this alert because we are concerned that many investors may underestimate the risks of trading on margin and misunderstand the operation and reason for margin calls.
Restrictions are placed on accounts for generating Liquidation Strikes and are based on the number of Reg-T liquidation strikes in a rolling 12-month period.
A certain level, expressed as a percentage, that when reached causes a trader's account to automatically begin liquidating his or her forex positions.
When you buy on margin, you must repay both the amount you borrowed and interest, even if you lose money on your investment.
A margin account is a brokerage account that allows traders to purchase securities using borrowed cash.
Almost all trading accounts on Stockfuse are margin accounts.
In striving to provide the most realistic virtual trading game experience, Stockfuse provides Reg T-compliant margin accounts.