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Locked Margins over 100%, what do they mean?


Aquiles P¨¢ez
 

In the midst of the war between retail traders vs. hedge funds, I saw the following tuit from Interactive Brokers today:?



I thought margins were not supposed to go over 100%, but why are they telling everyone that margin SELL has such requirement? Is it often? What does it mean under this scenario??

Any help is appreciated.?


 

They are reducing the amount of shares you can trade for long or short positions.

Essentially they don't want you to trade them.


Best wishes,

M

On Fri, 29 Jan 2021, 06:07 Aquiles P¨¢ez, <aquilesjlp300@...> wrote:
In the midst of the war between retail traders vs. hedge funds, I saw the following tuit from Interactive Brokers today:?



I thought margins were not supposed to go over 100%, but why are they telling everyone that margin SELL has such requirement? Is it often? What does it mean under this scenario??

Any help is appreciated.?


 

That's adequate of course.
Stock demonstrated it can go 2x or 3x in one day.
So short positions are very risky.


 

Hopefully, there is a huge lawsuit that teaches the brokers not to do this again AND THEN we might know the full story.

Futures can go to negative and regular stocks are not able to go below $0 as they should get delisted by then and at $0 all liability to short seller is gone. That is my understanding. I guess these rules are written somewhere.

Looks like 300% is a discouragement tactic. Or it could be that their systems go below $0 for regular stocks as a technical issue and they didn't have time to fix it.


 

No, it's something like crazy 40.000 margin per shorted bitcoin
because IB don't know what crypto-fanatics can do