Interactive Brokers Reportedly Increases Margin Requirements on MicroStrategy Products

Investing.com -- It has been reported that Interactive Brokers is gradually increasing margin requirements to significantly reduce its risk exposure to MicroStrategy. The brokerage firm recently informed its clients about this move in a letter sent out.

Interactive Brokers stated, "In light of the current market environment, IBKR will be raising the margin requirement for all MicroStrategy Inc. products (Stocks, Equity, Options, etc.)." The firm warned its clients that the maintenance margin requirement for MicroStrategy Inc. positions will increase a minimum of 50% from the current level.

The increase will take effect after the New York close on January 8, 2025, and will be implemented in daily increments until the trading date of January 13, 2025. This means that clients holding positions in MicroStrategy Inc. should prepare for higher margin requirements.

MicroStrategy has emerged as a derivative investment vehicle tied to the rise in Bitcoin. The company had accumulated 447,470 bitcoins by the end of 2024, contributing to an increased risk profile.

On Friday, MicroStrategy announced a plan to raise up to $2 billion through one or more public offerings of its preferred shares, which will have priority over the company's Class A common stock. The aim of this capital increase is to strengthen MicroStrategy's balance sheet and enable the company to purchase more bitcoins.