L/S cash-neutral portfolio exceeds margin

External question — Quantitative Finance Stack Exchange Author: nijshar28 Original post: https://quant.stackexchange.com/questions/52933 License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation: HTML converted to plain text; contact email addresses removed. I am testing out a systematic, cash-neutral, long/short strategy in a paper trading account with Interactive Brokers. Each day, an algorithm tells me what my target portfolio should look like in terms of relative position sizes. So, I multiply these target percent positions by 97% of my account value to yield target dollars amounts. I then divide these dollar amounts by the last close in order to get the target number of shares, take a difference between my currently held positions and these target positions (in shares), and send the corresponding orders to the broker. The problem is that I constantly run out of Excess Liquidity when I try to place these orders (i.e. I exceed my maintenance margin). This happens even though my account value generally does not move by more than 0.5% in a day (it is a diversified, cash neutral portfolio). I trade a lot of low price stocks (under 5 and 2.5 dollars so these might have increased margin requirements) but I feel there must be a bigger reason why this keeps on happening. Should I try keeping more cash in reserve, i.e. target positions to 90% of account value instead of 95-97%? Or am I completely off base and the problem is elsewhere? Any advice is appreciated. Thanks! UPDATE: The mystery has been solved. For most of the names I trade, my broker (IB) happens to have a special margin requirement of 100%, which effectively reduces the account's excess liquidity to 0.