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IB Blasts Preemptive Margin Hike Warning

Tyler Durden's picture




 

The brokers are getting pissy again - it must be that time of the month again....when vol is about to surge. In a blast to all exchange members, Interactive Brokers has just warned of imminent margin hikes due to "the recent spike in volatility of various commodity products." Of course, expecting vol (just like inflation), one can argue, is more important than even experiencing it. And it promptly becomes a self-fulfilling prophecy. In other words, should other brokers and/or exchanges follow suit with this preemptive margin hike warning, it may be time to step to the sidelines. Then again, in centrally planned, manipulated stock (and now all other) markets, this is easily the best decision regardless...

Full IB email:

To:CDE,CFE,DTB,ECBOT,ELX,FTA,GLOBEX,HKFE,IDEM,IPE,KSE,LIFFE,MATIF,MEFFR,V,

MEXDER,MONEP,NSE,NYBOT,NYMEX,NYSELIFFE,OMS,OSE.JPN,SNFE,SGX,SOFFEX, TSEJ traders:
Tue May 24 13:52:36 2011 EST

Please be advised that, in light of the recent spike in volatility of various commodity products, and in an effort to more accurately reflect price risk for such contracts, we will be enhancing the methodology used to identify and price this risk. As a result, the house required margin may be greater than the Exchange-required margin in specific, high volatility products. In order to minimize the impact of this enhancement, any margin increases will be implemented gradually, beginning with today's intra-day parameter refresh. Please monitor and manage your risk accordingly.

h/t London Dude Trader

 

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Tue, 05/24/2011 - 15:25 | 1306352 Doyle Hargraves
Doyle Hargraves's picture

PHYSICAL BITCHEZ!

Wed, 05/25/2011 - 22:55 | 1311644 TheGoodDoctor
TheGoodDoctor's picture

True, but this is like the government saying it's an issue of National Security.

Tue, 05/24/2011 - 15:27 | 1306355 TruthInSunshine
TruthInSunshine's picture

Don't worry b/c Eric PlaceHolde & Team Obama caught the evil oil speculators who were interfering with Bernanke's brilliant monetary policy implementation (hint, don't look for JPM or GS anywhere in the thick plot)!!!!!!!!

LMFAO

US Commodity Regulator Sues Oil Traders
Tue, 05/24/2011 - 15:33 | 1306385 TheTmfreak
TheTmfreak's picture

This is the laughableness of central "market" values for items. Gaming the system because there is a system to game.

Tue, 05/24/2011 - 15:26 | 1306357 dbach
dbach's picture

To be fair to the CME, after the smashing in the first half of May, silver is much more stable now. There has been almost no vol the last 7 days. A good time to go long calls with the low vol.

Tue, 05/24/2011 - 15:34 | 1306371 ffart
ffart's picture

Looks like silver popped a boner on this news. How can they go after oil speculators when THE OIL SPECULATORS WERE IN THE WHITEHOUSE ALL ALONG??? (ghost noises)

http://www.businessinsider.com/lloyd-blankfein-laura-white-house-state-dinner-2011-1

Tue, 05/24/2011 - 15:35 | 1306382 Franken_Stein
Franken_Stein's picture

 

United forever in friendship and labour,
Our mighty republics will ever endure.
The Great U.S. Union will live through the ages.
The dream of a people their fortress secure.

 

Long live our American motherland,
Built by the people's mighty hand.
Long live our people, united and free.
Strong in our friendship tried by fire.
Long may our crimson flag inspire,
Shining in glory for all men to see.

 

Tue, 05/24/2011 - 15:35 | 1306396 Soul Train
Soul Train's picture

And let Texas be the first to leave the federal government tyranny and charade.

Tue, 05/24/2011 - 16:03 | 1306488 LawsofPhysics
LawsofPhysics's picture

I agree.  Let's get the intel on the weapons used to crush those "terrorists" before the rest of us try to leave.

Tue, 05/24/2011 - 15:33 | 1306387 Missing_Link
Missing_Link's picture

Wow.  Remind me to never, ever, ever use Interactive Brokers.

Tue, 05/24/2011 - 16:27 | 1306581 CD
CD's picture

I dunno. Another way to look at it is that this brokerage is attempting to level the playing field by telegraphing to the little fish what the inside players know hours/day earlier.

Tue, 05/24/2011 - 15:35 | 1306395 RobotTrader
RobotTrader's picture

Yep, there was a slight uptick in the CRB Index today, so the "inflation fighters" at the Fed are putting the word out to all the wire houses to "get ready to rumble" with more margin hikes.

Tue, 05/24/2011 - 15:36 | 1306400 RobotTrader
RobotTrader's picture

Next step will be to raise margins on all put options in the following sectors:

Banking

Brokerage

Retail

REITs

Consumer Discretionary

Tue, 05/24/2011 - 16:01 | 1306482 SheepDog-One
SheepDog-One's picture

Youre so gay MomoFader.

Tue, 05/24/2011 - 16:26 | 1306586 Fiat2Zero
Fiat2Zero's picture

I have to agree. Only taunts that worked when I was in high school are appropriate for the mome-ster.

Tue, 05/24/2011 - 16:11 | 1306506 HelluvaEngineer
HelluvaEngineer's picture

Can you post a chart of BIDU?  Bullish close.

Tue, 05/24/2011 - 15:40 | 1306403 Quinvarius
Quinvarius's picture

Translation:  We trade in a sandbox vs our clients and they are kicking our asses.  We feel it is time to return to the scene of the crime and double dip.  We promise we will stop when we break even.

So who is really the degenerate gambler?

Tue, 05/24/2011 - 16:23 | 1306572 XenoFrog
XenoFrog's picture

Silver, when it goes up, it's dangerous volatility.

When it sits at $35 for a week, it's dangerous volatility.

When it falls 30% in a couple of weeks due to their manipulations in the market, that is healthy market behavior.

Tue, 05/24/2011 - 16:25 | 1306582 Fiat2Zero
Fiat2Zero's picture

Be super careful with "Satan's Metal". Not only is it volatile, but it can damn your eternal soul to hell.

Tue, 05/24/2011 - 16:33 | 1306605 XenoFrog
XenoFrog's picture

I am impervious to silver bullets. 1000oz silver bars on the other hand...

Tue, 05/24/2011 - 20:08 | 1307267 Rynak
Rynak's picture

Wait, blythe is satan? I thought that position was already taken by Ben?

Tue, 05/24/2011 - 20:57 | 1307405 old naughty
old naughty's picture

so what would you call this we are in?

Tue, 05/24/2011 - 15:41 | 1306414 Fiat2Zero
Fiat2Zero's picture

Better get on the horn to Asia, because your trading session is almost over.

The panic is palpable.

Tue, 05/24/2011 - 15:49 | 1306431 PaperBear
PaperBear's picture

Would the last trader to leave the futures market please turn the lights off.

Tue, 05/24/2011 - 15:52 | 1306442 RobotTrader
RobotTrader's picture

Notice the panic selling into the bell by the commodity stocks.

Can't blame them.

Why stand in front of a moving train operated by Uncle Gorilla, who is bound and determined to run over all commodity speculators?

Tue, 05/24/2011 - 16:06 | 1306491 SheepDog-One
SheepDog-One's picture

'Panic selling'!!! Oh wait....hardly down at all, most commodities up....just more drama from ZH lead drama queen MomoFader.

Tue, 05/24/2011 - 16:31 | 1306565 Fiat2Zero
Fiat2Zero's picture

Panic selling by JPM to bang the close on silver, sure.  Don't worry momo, they manage to cancel most of the 10,000 trades they do, so it doesn't cost JPM too much (so your checks will keep coming).

And here it comes folks, the predictable pseudo-panic selling in the last minute of trading...wait for it...wait for it...

Blythe is one predictable bitch.  She should vary the shit up once in a while.

Tue, 05/24/2011 - 16:22 | 1306568 Glasgow Gary
Glasgow Gary's picture

SLV vs SPY. Over the next 12 months. The former will outperform. See you here next May.

GG

Tue, 05/24/2011 - 15:54 | 1306458 Confucious 222
Confucious 222's picture

OK, so do the HFbots get a litlle more juice when everybody else gets a margin hike?

I'm picturing Turbo Tim and Benny Bux at the Lionel transformers, pushing the levers all the way to "10".

Of course they are wearing their engineer coveralls and caps.

Tue, 05/24/2011 - 15:57 | 1306459 Confucious 222
Confucious 222's picture

OK, so do the HFbots get a litlle more juice when everybody else gets a margin hike?

I'm picturing Turbo Tim and Benny Bux at the Lionel transformers, pushing the levers all the way to "10".

Of course they are wearing their engineer coveralls and caps.

Tue, 05/24/2011 - 16:00 | 1306479 LRC Fan
LRC Fan's picture

Terrible looking close for the bulls...probably means we'll be up 125 tomorrow.  BTFD bitchez

Tue, 05/24/2011 - 16:02 | 1306487 SheepDog-One
SheepDog-One's picture

Probably means you have no idea what youre doing.

Tue, 05/24/2011 - 16:10 | 1306519 HelluvaEngineer
HelluvaEngineer's picture

Using the "Technical analysis is a tool for baiting shorts" theory, he's probably correct.  They'll just pump in an extra billion after hours to guarantee the "Futures are up, indicating that the recovery is intact" morning news.

Tue, 05/24/2011 - 16:06 | 1306490 Glasgow Gary
Glasgow Gary's picture

The war for JULY sillver is about to begin.

GG

Tue, 05/24/2011 - 16:12 | 1306496 Franken_Stein
Franken_Stein's picture

 

Since America is now officially having a centrally planned economy,

with a centralized power structure whose iron grip emanates from Washington into all corners of the nations,

we cannot suppress an urgent feeling of pride and amusement that we now have finally reached our goal

that we have been persistently pursuing for over a century now since 1910,

when we first got together on Jekyll Island, where we drew up the plans to intorduce a central bank in the  then virgin-like United States,

built on the principles of those we had already established throughout Europe.

 

So please, Ladies and Gentlemen,

I ask you to rise from your seats,

to place your hands on your chests over your hearts,

and sing with us the national anthem of the Great American Union:

 

http://www.youtube.com/watch?v=9UQ1hw2bkdA&feature=related

 

A-hahahahaha !

 

Tue, 05/24/2011 - 16:10 | 1306515 SheepDog-One
SheepDog-One's picture

Ja commrade!

Tue, 05/24/2011 - 16:06 | 1306502 Sudden Debt
Sudden Debt's picture

Anybody who has a brain is putting his/her money into commodities. They'll always be worth more than the FED cotton.

And time is ending. It's not like they can prepare for another few Q's or even a year.

Anybody who doesn't own AT LEAST 20% of his/her assets in PM's is a fool these days.

 

 

Tue, 05/24/2011 - 16:11 | 1306521 SheepDog-One
SheepDog-One's picture

Exactly, and dont forget the not so precious metals as well formed into things like AR 15's and ammo!

Tue, 05/24/2011 - 16:42 | 1306651 mayhem_korner
mayhem_korner's picture

Those are the most precious ones to me...

Tue, 05/24/2011 - 17:40 | 1306821 Au_Ag_CuPbCu
Au_Ag_CuPbCu's picture

They're all precious to me :)~

Tue, 05/24/2011 - 18:57 | 1307056 Doyle Hargraves
Doyle Hargraves's picture

Have Gun(s)...will travel! (A lot of ammo, too!)

Tue, 05/24/2011 - 16:16 | 1306522 Ecoman11
Ecoman11's picture

Ohhh they must be talking about this spike from today.

http://i55.tinypic.com/2nlv4fq.png

Tue, 05/24/2011 - 16:26 | 1306574 Fiat2Zero
Fiat2Zero's picture

Nice graph. Maybe I'll go long lumber (its going to attract a lot less attention than S-I-L-V-E-R...shhhh).

Tue, 05/24/2011 - 16:57 | 1306634 Fiat2Zero
Fiat2Zero's picture

Is anyone else watching the minute to minute action of the silver and gold charts at the close? There is an epic battle going on.

EDIT:  The silver beach ball just keeps popping up with every attempt to keep it down.  It's intermission time, everyone grab some popcorn.  The real show will start on Asian hours (remember those sucker Chinese who are hoovering up the silver - don't they know you can dig it out of the ground for 5 bucks?).

EDIT:  I think someone is fucking around with Blythe and is going to thwart her standard bang the close.  People, if you want to play the game, the last thing you should be is 100% predictable.

Tue, 05/24/2011 - 16:43 | 1306643 RobotTrader
RobotTrader's picture

The Fed declares "World War" on oil speculators.

http://www.marketwatch.com/story/the-feds-war-on-oil-market-gamers-2011-...

Tue, 05/24/2011 - 16:45 | 1306655 Fiat2Zero
Fiat2Zero's picture

Since the CFTC can't find it's proverbial ass with both proverbial hands, it's doubtful this will go anywhere.

However, it's great grist for the re-elect the president effort.

And it seems to me there is already a CFTC investigation in the queue on Silver manipulation by the Morgue (that's manipulation _downward_ - just thought I had to be explicit with the replicant momofader, lest he get confused).

This will all blow over soon and they can go back to surfing porn during work hours.

Tue, 05/24/2011 - 16:46 | 1306659 Ecoman11
Ecoman11's picture

The war is on physical stockpiling. Read how the UK Parliament openly admits there is a "Monopoly Supplier" in the metals market.

http://www.publications.parliament.uk/pa/cm201012/cmselect/cmsctech/726/...

Tue, 05/24/2011 - 16:54 | 1306675 Fiat2Zero
Fiat2Zero's picture

Now who could that supplier be selling all that paper silver...let's think...

Tue, 05/24/2011 - 17:10 | 1306730 Ecoman11
Ecoman11's picture

Exactly, the same people who cornered %80 of the copper warehouse supply. So hoarding a commodity is now considered illegal except for bonifide hedgers.

Tue, 05/24/2011 - 16:45 | 1306654 TruthInSunshine
TruthInSunshine's picture

If no one buys the sell siders bullshit, commissions go way down, and baby needs a new pair of shoes!

Uncle Bernanklecide, can we get POMOonSteroids for the Wall Street WIC?

Tue, 05/24/2011 - 16:52 | 1306677 RobotTrader
RobotTrader's picture

I wonder when the guardians at Ft. Knox are going to openly admit that there is no gold left in the vaults, however, they are now chest-puffing about being a "Monopoly Supplier" of "Short Gold at Market" COMEX order tickets?

Tue, 05/24/2011 - 16:59 | 1306685 Fiat2Zero
Fiat2Zero's picture

Momo, why do you always try to bang the close on the commodities threads?

Tue, 05/24/2011 - 17:17 | 1306740 poydras
poydras's picture

This looks to be risk management rather than manipulation.

Tue, 05/24/2011 - 17:21 | 1306764 Fiat2Zero
Fiat2Zero's picture

uh right.  Wouldn't it _always_ look like risk management?  Its panic at the disco baby.

Tue, 05/24/2011 - 17:39 | 1306819 Fiat2Zero
Fiat2Zero's picture

Satan's Metal puts in a good showing, testing the $36.60 resistance line, 10 times (it's a good thing that there is no price manipulation going on).

Gold is starting to rocket up.

Asian trading hours will be interesting to watch.

I'd expect an all out margin hike assault in 24 hours.  No doubt Obama, Biden and Hillary will be in the situation room, crowded around a monitor, watching the takedown.

I'll be interesting to see how the takedown proceeds.  It seems to me that it has to be bigger than the previous actions, otherwise it will be ineffective.  I guess we'll know in 24 hours.

Tue, 05/24/2011 - 17:40 | 1306830 user2011
user2011's picture

Actually,  I think it is a good thing that IB does it ahead of CFTC or CME do it.     IB limits the margin will actually reduces their income.   Fewer trades and fewer comissions, it is not in their interests.   But it helps it's customers for not having to force closing their positions.    

And any margin raising action of CME and CFTC won't be impacting much.   It is softening the blows.

Tue, 05/24/2011 - 17:43 | 1306833 user2011
user2011's picture

Actually,  I think it is a good thing that IB does it ahead of CFTC or CME do it.     IB limits the margin will actually reduces their income.   Fewer trades and fewer comissions, it is not in their interests.   But it helps it's customers for not having to force closing their positions.    

And any margin raising action of CME and CFTC won't be impacting much.   It is softening the blows.

Tue, 05/24/2011 - 18:29 | 1306970 jmc8888
jmc8888's picture

The price and risk models, circa Prodigy Online, need to be updated. Whoops, we can't access the file because it needs Windows 3.1. 

Sure we should of noticed sooner, but it hadn't been on our minds until....Ben B...nevermind

Tue, 05/24/2011 - 18:28 | 1306975 jmc8888
jmc8888's picture

The price and risk models, circa Prodigy Online, need to be updated. Whoops, we can't access the file because it needs Windows 3.1. 

Sure we should of noticed sooner, but it hadn't been on our minds until....Ben B...nevermind

Tue, 05/24/2011 - 19:53 | 1307219 Dolemite
Dolemite's picture

Might explain why everything looks like a sell

http://deadcatbouncing.blogspot.com/

Tue, 05/24/2011 - 23:34 | 1307810 The Fonz
The Fonz's picture

Have you considered perhaps that gold and silver might be allowed to climb to smack the pesky dollar down this time? I canno t help but wonder at this possibility, after all we have a race to the bottom to win. Let gold climb, smack oil, drive the dollar down, and get a 20% retracement and base both allowing QEIII and allowing the market to perhaps have a few equities that are not outrageously overvalued to have a rally on. I suppose that would mean unexpected weakness in the large cap stocks...

Well.. that is all just guesswork and theories, nothing solid but perhaps worth considering as possible. My instincts make me fear this path though... so I cannot help but consider it.

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