Interactive Brokers is raising minimum margin requirements on clients’ accounts in anticipation of increased market volatility ahead of the U.S. presidential election.
In an email sent to investors and posted on Twitter, the discount brokerage firm noted that “elevated option implied volatilities indicate that the markets will be confronting elevated volatility both before and after the November 2020 election.”
As a result, the firm believes “it’s appropriate to start controlling leverage in a measured fashion in advance.”
Steve Sanders, Interactive’s executive vice president of marketing, told the Financial Times that the firm is “continuously evaluating the current market environment and our margin requirements are a reflection of that.”
The margin increase will take effect gradually, starting Sept. 28 for initial margin requirements and Oct. 5 for maintenance margin requirements, culminating in an increase as much as 35% above normal margin requirements for each.