OK, it’s not technically the fourth trade, by then I already had one put and just received a margin account. I’ll make a seperate post as the previous was a little picture heavy.
This was the first realization that I had been upgraded. My buying power increased. Basically, there is 8k there, and I deposited 2k, and so it seems to be x4 margin with level 3 permission.
So at this point I just had the long call.
So the positive value of the green graph is about half of a percent, and this correlates to the increase in settled cash (ten pounds added to 2k) and so I assume this is the profits graph.
So by pure chance, I found out that, now I have a margin account, when I now require dollars in the future, it won’t auto convert from my currency to usd, it will create a margin loan in dollars. So it will be done for all fees, which is a small amount, but for larger amounts if I am assigned. So it’s necessary to change manually to USD first. IB has a two dollar minimum charge, but I realised that I can do it via my wise account.
At this point I needed just a small amount to cover the fees, but Wise charge this flat fee of more than one dollar. I’d also need to change the rest in my account, and so it didn’t make sense moving money back and forth.
It ended up a bit more than sending to Wise and back, but Wise is famous for closing accounts for no reasons, and so I don’t want to do that. However, the Wise account can receive dollars directly, which I can spend abroad on my card, so it’s good to know for the future.
So the totals are still shown in home currency.
So apparently, there is 0.06 in leaverage, and I have no idea how that is calculated.
I think I did get this filled, or something very close to it.
This didn’t get filled. I got something a few days later at this strike but less premium. That might be for the better as there is a limit to the number of trades you can do close to each other when you have a margin account, I think it’s three in five days or something, if you go over, you have to have 25k on hand.
So the equity with loan value means they are lending me around 30 for some reason. No idea what that means. Well, I know what it means but don’t know how I borrowed anything. It could be for fees, or loans while waiting for settlements. I’ll look into it and report back. It might be a fee adjustment or change in equity value.
SMA is Special Memorandum Account, which is how much I could borrow. It adjusts according to my equity holdings.
I think securities gross position is… securities, which I don’t own as I’m trading options, so …. bah. It might be a nominal value of the options.
No idea.
The new monthly for the trades I was now going for. I didn’t fill these exact limits, but I got very similar a few days later:
So concerning the PMCC. I had the 400+ day leap for 160. The premiums for monthly calls were so low that when I did the maths, it made more sense to sell one for 120 days for 30usd. Yes, that’s a bit unusual. But don’t forget the fixed 1.56 fee I’m paying per contract. I got a strike of 11.85, which puts me in the money for twenty five if I’m called. If not I still have the leap and it might have risen so a new call will further reduce cost basis. If not, then I can wait it out for it to come closer to the money.
So I did get this. Over the next week I filled two more at 9.5 and 10.
So, not I have three puts, 9, 9.5 and 10. A leap strike 10 for 400 days with a call written against it 120 days strike 11.85 for 30 in premium. Technically, there is no margin used. I have enough in cash for three assignments of stock and three puts matching it. Then I have a short 120 day call covered by as 400+ day leap, which technically requires margin but doesn’t use it.
The puts are monthly and currently the stock is in an upward trend, and so I will look at the figures I have tomorrow, where I am and scenarios going forwards.
Update: a couple of weeks later
So I’m going to briefly recap my positions, and then look at how my account is.
I initially added 2kgbp. I bought these positions on Ford
Strikes at 9, 9.5 and 10 (selling puts)
I bought a leap 400 days out for 160 strike price 10 and sold a short(ish(three month) call against it for 30.00.
Because I was doing these more advanced trade I needed to apply for leverage, and appear to have been granted x3.
I changed almost all the cash into usd as with a margin account, if you get assigned in dollars or have fees in dollars and don’t have them, then the balance is taken from leverage, and you are billed for it. So that made sense, but the currency moved against me. The overall balance is shown as gbp on the dashboard and I was down about 50 usd although the positions went up. I got a warning from IB that I’d lost 10% of my initial balance.
Ford trades about 10.15 and there have been no assignments.
So in the dashboard, as of today, my figures are:
Account gbp: 1950.84
Maintenence margin 513.84
Excess liquidity 1368.52
Buying power 5192.06
BALANCES
Net liquidity: 1950.84 (gbp)
equity with loan (EWL) 1882.01
Previous day EWL: 186.09
Regulation T EWL 1882.01
SMA 1649.31
Buying power 5192.02
Securities gross position V… 145.16
Cash 1882.01
Settled cash 1882.01
Available funds: 1298.01
Leverage 0.07
MARGIN REQUIREMENTS
Initial margin 583.99
Maintenence margin 513.49
Overnight (same as above)
Current Interactive Dashboard
Account GBP: £1,950.84
This is the total value of my account in GBP, my base currency. It’s essentially the net liquidating value (NLV), which represents the total worth of my account if I were to liquidate all positions and cash right now. Think of it as the “big picture” snapshot of my account’s value, including cash and any securities I hold, converted to GBP.
This figure gives me a quick sense of my account’s overall health.
Maintenance Margin: £513.84
What it means: This is the minimum amount of equity I need to keep in my account to maintain my current positions without triggering a margin call. For stocks, the maintenance margin is typically 25% of the market value of securities held, though IB may set higher “house” requirements for volatile or low-priced stocks. In my case, this figure reflects the equity needed to support my positions.
If my account’s equity falls below this level, IB could issue a margin call, asking me to deposit more funds or sell assets. For you, keeping an eye on this number helps avoid unexpected liquidations, especially in a margin account where you’re borrowing to trade.
I thought this would be zero as my cash almost covers my cash secured puts, and the thirty dollar short call is covered by the leap, but IB calcuates this based on max loss. The main thing is to look at the equity with loan amount, and make sure that stays above the maintenence margin.
Excess Liquidity: £1,368.52
This is my margin cushion, calculated as Equity with Loan Value (EWL) minus the Maintenance Margin (£1,882.01 – £513.84 = £1,368.17, with slight rounding differences). It shows how much extra equity I have above the minimum required to hold my current positions.
A positive excess liquidity means I’m good, with a buffer against market drops or margin calls. For you, this is a key indicator of how much wiggle room you have before IB starts liquidating positions to cover a margin deficit. A higher number means more safety.
Buying Power: £5,192.06
This represents the maximum value of securities I can buy without depositing additional funds. In a margin account like mine, buying power is calculated as [Minimum (Equity with Loan Value, Previous Day EWL) – Initial Margin] × 4. The multiplication by 4 reflects the leverage in a Regulation T margin account, where I can borrow up to 50% of a stock’s value, effectively doubling my purchasing power (1 / 0.25 = 4). My buying power is high because my positions are minimal, leaving most of my equity available for trading.
Balances
Net Liquidity: £1,950.84 (GBP)
Identical to “Account GBP,” this is the total value of my account (cash + market value of positions) marked to market, converted to GBP. It’s what I’d get if I closed all positions today. In my case, it matches my account value since my positions are minimal.
This is your go-to number for understanding your account’s total worth at any moment. For beginners, it’s a clear benchmark to track your portfolio’s growth or decline.
Equity with Loan Value (EWL): £1,882.01
This is my collateral, calculated as the cash balance plus the market value of my securities (excluding options, which don’t count for borrowing). It represents the portion of my account that can be used to support margin loans or hold positions.
EWL is critical because it determines my ability to borrow and maintain positions. For you, it’s the foundation for calculating other metrics like excess liquidity and buying power, so it’s a number to watch closely.
Previous Day EWL: £186.09
This is the Equity with Loan Value from the close of the previous trading day (16:00 ET). It’s used in buying power calculations to ensure I don’t over-leverage based on intraday market fluctuations.
The lower of current EWL or previous day EWL is used to calculate buying power, so a low previous day EWL can limit my trading capacity. For you, this figure helps IB enforce consistent margin rules, preventing excessive borrowing during volatile days.
Regulation T EWL: £1,882.01
This is the Equity with Loan Value specifically used for Regulation T margin calculations, which are enforced at the end of the trading day (3:50 PM ET). It matches my current EWL, indicating no discrepancies in how IB applies Regulation T rules.
SMA (Special Memorandum Account): £1,649.31
The SMA is a line of credit created when the market value of my securities increases. It’s calculated as the greater of: (Prior Day SMA ± Change in Day’s Cash ± Today’s Trades Initial Margin Requirements) or (Equity with Loan Value – Regulation T Margin). A positive SMA means I have additional borrowing capacity, while a negative SMA at day’s end could trigger liquidation.
Why it matters: This is like a bonus credit line for margin trading. For you, a healthy SMA means more flexibility to trade without depositing cash, but monitor it daily to avoid surprises, as IB enforces Regulation T at 3:50 PM ET.
Buying Power: £5,192.02
Same as in the account summary, this is the total value of securities I can buy using my equity and IB’s margin. The slight difference (£5,192.02 vs. £5,192.06) is likely due to real-time rounding or currency conversion.
Securities Gross Position Value: £145.16
This is the total market value of my securities (stocks, bonds, etc.) in the account. My small position value reflects minimal holdings, likely because I’ve just started trading or converted cash without significant investments yet.
Cash: £1,882.01
What it means: This is the cash balance in my account, including any funds from dividends, sales, or deposits. It matches my EWL, suggesting most of my account value is in cash rather than securities (it’s actually securing my puts).
Settled Cash: £1,882.01
This is the portion of my cash that has fully settled and is immediately available for trading. Since it matches my cash balance, all my funds are settled, likely because I haven’t made recent trades that are still clearing.
In a margin account, settled cash is critical for opening new positions without relying on pending settlements. For you, it’s the cash you can actually use right now, so check this before placing trades.
Available for Trading
Available Funds: £1,298.01
Calculated as Equity with Loan Value minus Initial Margin (£1,882.01 – £583.99 = £1,298.02, with minor rounding). This is the amount I can use to open new positions without borrowing more or violating margin rules.
Why it matters: This is a practical number for planning trades. For you, it shows how much you can invest right now without pushing your account into a margin deficit, helping you stay within safe limits.
Leverage: 0.07
What it means: This is the ratio of my Securities Gross Position Value to my Net Liquidation Value (£145.16 / £1,950.84 ≈ 0.07). A low leverage ratio indicates I’m using very little borrowed money relative to my account’s value.
Why it matters: Low leverage means lower risk but also lower potential returns. For you, monitoring leverage helps balance the trade-off between amplifying gains and avoiding large losses if the market turns.
Margin Requirements
Initial Margin: £583.99
This is the minimum equity I need to open new positions, typically 50% of the purchase price for stocks under Regulation T rules. My initial margin is slightly higher than the maintenance margin, reflecting the stricter requirement for initiating trades.
This number limits how much I can borrow to buy securities. For you, it’s a guardrail to ensure you have enough skin in the game when starting a trade, protecting both you and IB from excessive risk.
Maintenance Margin: £513.49
What it means: Slightly different from the account summary (£513.84), likely due to real-time updates or rounding, this is the minimum equity I must maintain to keep my positions open. It’s typically 25% for stocks but can vary based on IB’s house rules.
Falling below this triggers a margin call or liquidation. For you, it’s a critical threshold to monitor to avoid forced sales, especially in volatile markets.
Overnight (same as above)
What it means: This confirms that my maintenance margin requirement remains the same for positions held overnight. Some securities have higher overnight margin requirements due to increased risk outside trading hours.
Knowing this helps me plan for holding positions overnight. For you, it’s a reminder to check if overnight requirements differ, as they can tie up more capital or increase liquidation risks.
Practical Takeaways for You
As a beginner on IB’s platform, these figures are your roadmap to managing a margin account. Here’s what I’ve learned and what you should keep in mind:
Stay above Excess Liquidity and Available Funds: These are your safety nets. My excess liquidity (£1,368.52) and available funds (£1,298.01) are comfortably positive, meaning I’m not at risk of a margin call. Aim to keep these numbers positive to avoid IB liquidating your positions.
Leverage is a double-edged sword: My low leverage (0.07) reflects a conservative approach, but the high buying power (£5,192.02) tempts me to take bigger risks. Use leverage wisely—margin amplifies gains but also losses.
Monitor SMA daily: My SMA (£1,649.31) gives me extra borrowing power, but if it goes negative by the end of the trading day, IB could liquidate positions. Check this in the Trader Workstation or IBKR Mobile app to stay ahead.
Understand cash vs. settled cash: My cash and settled cash are equal (£1,882.01), but if you’re actively trading, unsettled funds can limit your buying power. Always confirm your settled cash before placing trades.
Margin requirements are dynamic: My initial (£583.99) and maintenance (£513.49) margins depend on my positions and IB’s rules. Check the “Margin Impact” feature in Trader Workstation before trading to see how new positions affect these numbers.
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Three cash-secured put options with strike prices of $9, $9.5, and $10, each covering 100 shares of a stock trading above $10, totaling a potential obligation of $2,850 (~£2,244).
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A Poor Man’s Covered Call (PMCC): a Ford LEAP option bought for $160 and a short call sold for $30.
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Key IB dashboard figures:
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Net Liquidation Value (NLV): £1,950.84 (~$2,477 USD), the total value of my account if liquidated.
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Securities Gross Position Value: £145.16 (~$184 USD), likely the current value of my LEAP.
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Equity with Loan Value (EWL): £1,882.01 (~$2,390 USD), matching my cash balance, showing I haven’t borrowed.
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Leverage: 0.07.
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Securities Gross Position Value: £145.16, the market value of my Ford LEAP option.
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Net Liquidation Value: £1,950.84, my account’s total value (cash + securities).
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Calculation: £145.16 ÷ £1,950.84 ≈ 0.074, rounded to 0.07.
