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Created April 22, 2014 23:18
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Cash v Reg T
Cash
An IB Cash account requires the account holder to have enough cash in the account to cover the cost of the transaction plus commissions. You cannot borrow to support trading in a Cash account. In addition, the following rules apply:
Shorting of stock is not allowed.
Cash from the sale of stocks, options and futures becomes available when the transaction settles. For example, US stock - three days, German stock - two days, US options - one day.
Intraday futures margin benefits (50% of regular margin requirements during the day, on certain exchanges), are not supported.
Limited purchase and sale of options are allowed.
The account may trade in multiple currencies, but must have the settled cash balance to enter trades.
Existing cash account holders can upgrade to a multi-currency cash account through Account Management.
Cash accounts may be upgraded to Reg T Margin accounts
Reg T Margin
An IB Reg T Margin account is a US regulatory-based margin account that allows borrowing to support equities trading, shorting of equities, full options trading, full futures/futures options trading, currency conversions and securities/commodities trading in multiple currency denominations. In addition, the following rules apply:
Purchase and sale proceeds are immediately recognized.
Margin requirements are computed in real time under fixed, predetermined rules, with immediate position liquidation if the minimum maintenance margin requirement is not met.
Reg T Margin accounts can be upgraded to Portfolio Margin accounts provided they meet the minimum requirements, but Reg T Margin accounts cannot be downgraded to Cash accounts.
US securities regulations require market participants identified as pattern day traders to maintain a minimum of 25,000 USD in equity or equivalent.
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