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Limited Margin IRA Accounts

What is IRA Limited Margin?

IRA Limited Margin (ILM) allows you to trade in margin without triggering trading restrictions, such as good faith violations, typically received in a cash account. ILM does not allow borrowing against existing holdings, creating cash or margin debits, short selling of securities, or selling naked options. It allows for day trading of stocks and limited options (supplemental limited margin and option agreement required) in the IRA.

Type of account registrations that are eligible:

Only the following IRA registrations are eligible for Limited Margin:

 Traditional IRA
 Rollover IRA
 Roth IRA

How does an account qualify for ILM?

The qualifying IRA must have all required IRA Account paperwork including:

 Minimum account equity balance of $2,000 and
 Supplemental Limited Margin and Option Agreement
What type of trading is allowed in an ILM Account?
 Long Purchase Trading
 Covered Call Options Trades
 Day trading up to 4X (If an account become a PDT the account must have minimum equity of at least $25,000)

What type of activities or trading is not allowed in an ILM Account?

 No overnight leverage and no borrowing
 No debit balances
 No Short Selling
 No Naked Call Options trading

How does the trading occur in the account?

Once all agreements have been processed by Apex, ILM is immediately available if the account’s total value is greater than $2,000. The account position(s) and cash are moved from the cash account (Type 1) to the margin account (Type 2). The system in the overnight process will then calculate all of the assets held in the account to determine the maintenance requirement and issue available Day Trading Buying Power (DTBP). Please note there is no intraday calculation based upon liquidated positions or based upon intraday cash deposits.

What does Day Trading Buying Power mean?

This means the amount available given to the account to trade throughout the day one-time without requiring additional funds or securities.

Can the account receive a margin call?

Yes, if the account exceeds its available buying power, if the account goes into a negative equity balance or the account has been flagged as a Pattern Day Trader (PDT).

How can the account get into a negative equity balance?

The account loses on a trade and doesn’t have sufficient funds to cover the loss.
The account is charged a fee and doesn’t have sufficient funds or equity to cover the fee.

What is a Pattern Day Trader (PDT)?

This means an account has executed four or more-day trades within a five-business day period.