Update in case anybody was interested: I ended up downgrading to a cash account because I realized that I’m not yet ready for a margin account. To be honest I am still not entirely sure what was going on, hence the downgrade. Here is what I told IB and what they replied.
Me :
I just recently opened my account and I am not completely certain yet how to trade with a margin account. Here is what I did: I transferred 1700.- CHF and then bought USD.CHF with it. Then I bought the VT ETF with my new USD. However after I completed the trade I started to receive notifications about my margin-cushion being critically low. Currently my account shows a margin of 1600. Could you explain to me why I am now on margin even though I had the funds to cover the trade? Or have the trades not settled yet and the margin will go away as soon as they did?
IB Reply:
Your IBKR account is a Reg T Margin account. Our system will calculate the Initial and Maintenance margin values for all margin accounts in order to calculate the other Available For Trading values (like Available Funds, Excess Liquidity etc). Initial Margin does not necessarily imply you have borrowed funds for trading.
Even though, you have positive cash balance remaining, i.e you have not borrowed funds from IB yet , the system deducts the margin requirements of your positions to calculate the Available funds and excess liquidity.
Kindly note that since your account value is below 2000 USD, it acts like a Cash account. Due to this, you are not receiving margin benefits. Therefore, the available funds and excess liquidity has dropped and you are receiving the margin cushion notifications. In order to avail margin benefits, your account value should be above 2000 USD. Margin cushion notifications are sent out when the excess liquidity drops below a certain threshold level (about 10% of your NLV).