Is Interactive Brokers Trying To Manipulate the Price of Small Cap Stocks Lower?

Let’s cut right to the chase – that’s a sarcastic, sensational post title.  I DO NOT believe that Interactive Brokers is trying to manipulate the price of small cap stocks lower.  But I’m wondering why all of the same people who thought that the COMEX’s margin hikes on silver and gold were attempts to manipulate the price of those metals aren’t reacting to Interactive Brokers’ announcement that they will be jacking up margin requirements on small cap stocks:

“As a result of recent market volatility, please be advised that IB is increasing the margin rates on low capitalization stocks (currently defined as companies with less than $250 million in market capitalization). The margin increases will occur in three steps beginning on Wednesday, September 21, 2011 and ending on Friday, September 23, 2011. The margin rates will increase to 50%, 75% and 100% at the open of business on 9/21/2011, 9/22/2011 and 9/23/2011, respectively.

The current list of stocks which are subject to this margin increase is subject to change. The current list can be found on the following page:

http://ibkb.interactivebrokers.com/node/1788 ( http://ibkb.interactivebrokers.com/node/1788 )

Upon implementation, any of the incremental margin increases may result in a margin deficit in the account. A margin deficit implies that an account becomes subject to automated liquidation. Please carefully review the current positions within your account and adjust the portfolio accordingly.

Interactive Brokers Risk Management”

 

related:

1) Margin Hikes – Chicken and the Egg

2) Margin Margin Margin

-KD

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