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Wes Smith

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Joined: 10/11/2012
Location: Ontario,Canada

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Subject : RE: 2X and 3X ETF Equity and Margin Risk Control
Posted : 5/17/2016 9:18 AM
Post #35904 - In reply to #35751

The original purpose of 2x/3x was to increase leverage.
Seems like the 2009 rules remove that advantage.
I remember reading about this rule. It was supposed to help settle down the big market moves that were blamed on large players tripling their influence (my oversimplified view)

I did some tests on my IB account and it doesn't look like IB enforces these margin rules.

For example.. I made an order for SSO 100 shares at a $20 limit.
Then I use the IB Check Margin tool for the order and it showed it as $2000. Didn't reflect the margin.

So it looks like I could buy $100K of SSO in an $100K account?

Or do the margin call rules come into affect at EOD or other reconciliation time?

I will ask IB and report back here.
Wes
Deleting message 35904 : RE: 2X and 3X ETF Equity and Margin Risk Control


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