OPTIONS Margin Requirements



In an equity account, margin is the amount of equity contributed by a customer (in the form of cash or margin-eligible securities) as a percentage of the current market value of the stocks or option positions held in the customer's margin account.

The margin balance in an account is the amount a customer has borrowed, using cash or margin-eligible securities as collateral, in his or her margin account.

A margin call occurs when a brokerage firm demands that a customer deposit additional equity in order to bring margin deposits up to a required minimum level. If the customer fails to meet a margin call, the customer's positions may be liquidated.

If you open a margin account, MB Trading allows customers to trade stocks with 4-to-1 intraday margin and 2-to-1 overnight margin.


PLEASE NOTE:
  • Pattern daytrading (PDT)) accounts require a $25,000 minimum balance. Pattern daytrading status is assigned to margin accounts which execute more than three (3) equity or options daytrades within five (5) consecutive business days.
  • Non pattern daytrading (NPDT) account is a margin account with account balance below $25,000. The account is given day trading buying power of a 4:1 basis as long as the account DOES NOT exceed Three (3) day trades in a rolling five (5) business day period.
  • Cash accounts do not have a minimum balance requirement.
  • Regular cash accounts and margin accounts are never charged account inactivity or maintenance fees.

NEW! Margin Account Restriction (Effective June 27, 2008)
Short Selling Rule Changes and Possible Buy ins:

As of October 17, 2008, The Securities and Exchange Commission is adopting an antifraud rule under the Securities Exchange Act of 1934 to address fails to deliver securities that have been associated with "naked" short selling. The rule will further evidence the liability of short sellers, including broker-dealers acting for their own accounts, who deceive specified persons about their intention or ability to deliver securities in time for settlement (including persons that deceive their broker-dealer about their locate source or ownership of shares) and that fail to deliver securities by settlement date.

What this means to you our client: MB Trading and our clearing firm Apex Clearing Corporation may be required to buy in "any and all short positions held past settlement date: trade date plus 3 days."

Since many of our clients, in fact "short" securities it would not be possible in most situations to contact you to alert you of the short position being bought in. Please monitor any short positions closely by logging into the MBT Desktop software or via our website: www.mbtrading.com. Please also keep this potential buy-in, in mind when considering buying back the "short" stock on the day after settlement. If the clearing firm also buys in, you will be long the stock. Both trades will stand as good trades. For more information on the rule please visit here www.sec.gov/news/press/2008/2008-211.htm


Margin Call Grid

This easy to read grid gives a brief explanation of margin calls, deadlines, how to meet the call, and the result.


NASD Rule 2520

A document from the NASD describing the rule change relating to daytrading margin requirements.


 
 

 

MB Trading, IB member FINRA, SIPC; MB Trading Futures, Inc. RFED/IB and member NFA. Trading in futures, options and Forex is speculative in nature and not appropriate for all investors. Investors should only use risk capital when trading futures, options and Forex because there is always the risk of substantial loss. MBTFS and MBTFX are sometimes referred to collectively herein as "MB Trading."

1MB Trading FX offers two Forex pricing models. Both models employ our RFED to client facing execution system with slightly different pricing and markup models.  For purpose of clarity the two pricing models (Plan 1 and Plan 2) both operate on the same technology.  The underlying technology is named The MB Trading Electronic Xrossing Network, abbreviated as EXN for the remainder of this disclaimer.  The main differentiator between the models is twofold.

A.    Difference in amount of markup or markdown of liquidity partner (banks) quotes when displayed to clients.
B.    Commission Structure charged to client

Plan 1 or “Pay for Limit” plan employs the EXN technology in a commission model. This model charges a client 2.50 in their base currency per 100k of executed currency for market orders and pays a client .50 of base currency for posted, executed limit orders. In the Pay for Limits model, the term "Payment for Limit Order" refers to a non-market order which is not immediately executable and rests on the internal limit order book for some period of time, thus adding liquidity when another order of equal or greater value fills with the resting order.

Free Commission Plan employs the EXN technology in a markup only plan, which means that MB Trading receives a markup embedded in the spread as compensation. This plan does not add an additional commission, does not pay the client a rebate for posted liquidity as Plan 1 does yet does still offer the benefit of allowing the client to post quotes which is displayed to all other clients on Plan 2.

Additional information to note is that “Actual Total Paid to Clients” counter is kept on the company website which displays The Actual Total Paid to Clients currency number which is updated every five minutes and stops counting during the weekend when the market is closed. The number calculates from the launch of Pay for Limits, which was January 31, 2011.

Due to higher cost of business in China, “Get paid for limit orders” is not available for Chinese residents. All Chinese residents have a fee of 2.50 for all order types. Accounts with special commission rates are excluded from Payment for Limit Orders. There is a minimum fee of $0.01 for all Forex and spot trading orders that take liquidity.

MB Trading earned a 4.5 out of 5 star rating in Barron’s 2011 Review of Online Brokers, tying for the top spot overall. The company earned a total of 33.8 points, one tenth of a point under the top score. MB Trading also scored in the top three for separate categories of Range of Offerings, Trade Experience, Trading Technology, Usability, and Customer Service and Education. MB Trading earned a 4.5 out of 5 star rating in Barron's 2010 Review of Online Brokers. The company ranked second overall and tied for first place in the categories of Trade Experience and Portfolio Analysis & Reporting. The company also won the category of Usability. The company also tied for first place in the separate categories of "Best for Frequent Traders" and "Best for Options Traders." This survey evaluated 27 Online Firms and does not include all Online Brokers.

*Real-time Forex Quotes are provided via the MBT Quote API. Quotes are available during platform hours from Sunday at 5 pm EST to Friday at 5 pm EST, except during the scheduled maintenance period from 4:58 pm to 5:06 pm EST. Extended maintenance periods are possible, and messages regarding maintenance are sent via the MBT Desktop, MBT Desktop Pro, and MBT Web 2.0 trading platforms. In addition, MBT begins MetaTrader 4 maintenance at 4:57 pm EST, one minute earlier.

MB Trading provides FREE real-time streaming Forex quotes in all software platforms. Demo accounts receive FREE streaming Stocks, Futures, and Options quotes which are delayed up to 20 minutes (per individual exchange requirement). FREE real-time streaming quotes for Stocks, Futures, and Options is available to nonprofessional users with funded, live accounts.

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