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I understand that the pit broker/market makers can fill the spread that way, but if the options are traded only on an electronic exchange (such as ISE) is there such possibility that the exchange's algorithm will recognize that a spread order limit fits to the aggregate limit of two individual...

I heard somewhere that a spread order may be filled not only against the exact opposite spread order (i.e., long put credit spread against short put credit spread with the same strikes) but also there is implied pricing functionality which allows a spread order to be filled against individual...

"your calendar spread ended at oct expiration, afterwards you are just holding long nov calls.." It's fine that the calendar spread in its original form ended at Oct expiration, but if you did not close your short leg prior to expiration than you will see at your account a "nice" debit of 50...

This is correct if you assume that the wide bid/ask spread that you face while trying to close or roll the position (which are very wide on index options such as the SPX) will not just further increase your initial debit and also that you have enough liquidity to close the position (i.e., that...

Hi, It is known that generally the maximum loss of a calendar spread is the debit paid. Nonetheless, I think this is not true regarding calendar spreads on cash-settled index options such as the SPX, in which one can lose much more than the debit paid. For example, if I buy 1150 SPX...

Any response? Thanks.

If suggest to verify it with them in advance if you don't want to have a "nice" meeting with their automatic liquidation algorithm.

Hello, is there any broker (except for IB) through which I can trade a spread order that includes futures and futures options? I want to trade it as a spread order that has no execution risk, and not by legging into the spread or by conditional orders. So far I see that only IB has this...

I already read your answer, and basically the margin should not be higher than the maximum loss of the position (see also jayre post in this regard), and this loss also cannot be higher than the cost to liquidate the position. The risk parameter becomes more relevant in positions which are...

jayre, did you check the other factors which may cause liquidation which are not realted to reg-t margin requirements, as I noted in my message? It may be the reason for your liquidation (and not any reg-t margin issues).

btw you can check by yourself the actual margin which is required in portfolio margin accounts in the following link: https://cpm.theocc.com/tims_online.htm note that the additional margin is shown as "haircut", and this amount is IN ADDITION to any premium received for shorting an option...

I checked and find that the problem is not unique to Eurex risk-based margin system, but all the risk-based systems, including U.S. portfolio margin, have the same problem, which is that in calculating the maximum possible loss they do not fully take into account the premium received for...

Please answer my question even if you are not familiar with Eurex margin treatment but with a U.S. portfolio margin treatment (it should be similar since both systems are SPAN based). It really sounds strange to me that a sophisticated SPAN or portfolio margin system will require margin...

Since it does not sound reasonable that a liquidation will occur because of a margin violation in a debit spread (which has no margin requirement except for the debit paid, as you stated), you should also check if your broker impose other limitations which may trigger liquidation, which are not...

If my account is labeled "professional customer" am I also subject to these "two sided order" limitations since I am still considered a "public customer"? Or in this situation there are no such limitations?

Assume assignment especially when the delta is close to 1.00.

Thanks so much for your help. As always, it is a great pleasure to read your professional responses. Does the open/close exception apply also to complex orders or only to single orders?

This is very strange. Did they force you to liquidate the position or was it just a "technical" margin call which did not result in any forced liquidation since the prices immediately thereafter corrected themselves?

I asked IB about the GPB to Net Liq limitation and they said that the limitation exists not because of a regulatory rule but it is IB's own decisions which is based on risk management factors. However, I did not succeed to get from them any explanation as to its basic logic and what exactly are...

I am not looking for short term options and longer term futures options are relatively less liquid than longer term ETF options.