The Z9 is a very nice system to trade ETFs over longer periods of time. However, the question arises which broker to choose to perform the trades?

So far I looked at Interactive Brokers, and it seems that with Regulation T their overnight margin requirement is 50% such that we effectively get



Do you know of any trustworthy broker offering a higher leverage than that on ETFs? Thanks for any suggestion!

Here is a very interesting document on Margin from TD Ameritrade:

https://www.tdameritrade.com/retail-en_us/resources/pdf/AMTD086.pdf

It is clear from "Margin Requirements" section on page 4 that per regulation the margin loan cannot exceed 50% for opening a position, which again amounts to leverage=2.

However, the next page talks about "Maintenance Margin", which is set to 30% for sensible assets. I guess that means after initially purchasing an asset at 50% margin, one can maintain the asset at only 30% the margin.

I am a bit confused though about when does the Margin requirement go from initial to maintenance? Anyone knows?

When the exchange closes, normally 3:30 pm EST.

Initial margin(50%) is required to open a position, maintenance (25% at IB) - to continue to hold.
For stocks/ETFs, maintenance margin will be in effect during the day, but will revert back to Initial for overnight, as the market closes.

In fact the initial margin is 25% and the maintenance margin is 50% with IB. That's why Z8 and Z9 backtests are based on leverage 2, since the maintenance margin is relevant here. At leverage 4, profits would be much higher.

Hm, just a difference in terminology.

https://www.interactivebrokers.com/en/index.php?f=26658&hm=us&ex=us&rgt=1&rsk=0&pm=1&ot=1&rst=1|0|1|0|1|0|1|0|0|1|0|0|1|0|1|0|1|0|0|0|1|0|0|0|1|0|0|0|0|0|0|1|0|0|0|1

Thank you for your replies!

Do you happen to know of any reputable broker with lower overnight margin requirements, or is Reg T the global standard and one can just as well go with IB and look no further?

As far as I understand, this is a "regulation"-driven margin in contrast to a risk-based margin for futures where exchanges/brokers are more or less creators of their own destiny.

Have a look at IB Share CFDs.