Interactive Brokers reminds traders about increased margin requirements for certain stocks
Electronic trading major Interactive Brokers Group, Inc. (NASDAQ:IBKR) has posted yet another message regarding the recent market volatility spike. The announcement was distributed via social media last night. In its latest announcement, Interactive Brokers warns traders of the increased margin requirements which apply to the trades in options on actively traded stocks and the underlying stocks.
The latest announcement by the company says:
“Interactive Brokers announced on January 30 that as of Friday, January 29, it had lifted all trading restrictions on AMC, BB, EXPR, GME, NOK and other options that experienced recent market volatility.
The options as well as the underlying stocks, are currently subject to increased margin requirements, which are subject to change depending on market conditions. IBKR has applied the same margin requirements and earlier trading limitations regarding these products to all clients.
The firm continues to monitor these volatile markets”.
On January 28, 2021, Interactive Brokers put AMC, BB, EXPR, GME, and KOSS option trading into liquidation only due to the extraordinary volatility in the markets. In addition, the company said that long stock positions would require 100% margin and short stock positions will require 300% margin until further notice.
Interactive Brokers said back then it does not believe that the situation will stabilize until the regulators and exchanges intervene.
Two days later, Interactive Brokers changed its stance. This happened several hours after the United States Securities and Exchange Commission (SEC) issued a statement regarding the recent market volatility spike.
The Commission said it will closely review actions taken by regulated entities that may disadvantage investors or otherwise unduly inhibit their ability to trade certain securities. In addition, the SEC said it will act to protect retail investors when the facts demonstrate abusive or manipulative trading activity that is prohibited by the federal securities laws. Market participants should be careful to avoid such activity, the regulator warned.