Interactive Brokers are in the process of revoking margin for ANY Australian client (individual or corporate) that do not meet the criteria for either a Wholesale Investor or Professional Investor.
These are defines as:
Wholesale Investor:
– net assets or net worth of at least A$2.5 million or
– have a gross annual income of at least A$250,000 in each of the last two financial years.
Professional Investor:
– you must have an AFSL,
– be a body regulated by APRA,
– be a superannuation fund (but not a SMSF) and/or
– have net worth or liquid net worth of at least A$10 million.
If you do not meet these criteria you will be contacted by IBKR regarding your account status and access to margin will be removed. You may still trade options and futures, but stock lending will cease.
This is an IBKR decision. It is not industry wide or ASIC directive.
What can you do?
My suggestion is to:
(1) assess the merits of your current systems without margin.
(2) Test different position sizing methods to maximise returns without margin. Here are some of my systems with adjusted position sizing
You can see that System 1 (MOC) has diluted returns regardless. System 2 (MOC) still shows promising returns using 5 positions at 20%. System 3 (Swing) also shows promising results using 10×10% and 5×20%.
If your system doesn’t show promising results I would suggest:
(1) adjusting the entry criteria to attain better results
(2) adjust from a MOC to a Swing system
(3) changing brokers.
On the last point, I will be having a meeting with TradeStation Securities on Tuesday. They have stated that retail clients can access margin. What will need to be determined is whether or not the API can be fed through the TradeStation platform.
The only issues I can foresee are that:
(1) the API will need to be reworked or you use the TradeStation platform for the trading instead, and
(2) it appears they do not have access to the ASX
