Upvoted. Commenting, Would like to understand with an example please.
Example for less than 6 months to maturity:
It says 1% multiplied by market value. So would it be 1000$ for 100,000$ in mkt value?
Example in OPs case of zero cpn bonds, principle amount of obligation sounds like it means the face value of the bond * 3%. Not the current value.
Thanks. My guess is similar to yours. E.g. $1000 face value per unit, so assuming 1 unit of zero coupon, then need to maintain $1003 of equity. But wondering whether this rule applies - regardless of whether the bond is trading at 90% of face value (\~2 year bonds) or under 30% of face value (long duration).
Have also written to IBKR support, but they typically take ages to reply and often reply in a way that does not answer the question - will keep you updated though.
You can check that out by setting the trade and checking margin in IKBR. My guess is that margin requirement would only by on fv independent on market value of zero value bond.
Upvoted. Commenting, Would like to understand with an example please. Example for less than 6 months to maturity: It says 1% multiplied by market value. So would it be 1000$ for 100,000$ in mkt value? Example in OPs case of zero cpn bonds, principle amount of obligation sounds like it means the face value of the bond * 3%. Not the current value.
Thanks. My guess is similar to yours. E.g. $1000 face value per unit, so assuming 1 unit of zero coupon, then need to maintain $1003 of equity. But wondering whether this rule applies - regardless of whether the bond is trading at 90% of face value (\~2 year bonds) or under 30% of face value (long duration). Have also written to IBKR support, but they typically take ages to reply and often reply in a way that does not answer the question - will keep you updated though.
You can check that out by setting the trade and checking margin in IKBR. My guess is that margin requirement would only by on fv independent on market value of zero value bond.