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April 22, 2014 23:18
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Cash v Reg T
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| 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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