any idea about future option margin

the marging requirements for option seems time related or strike related. IB does not ask me for margin for OTM in friday expiration, for ITM on friday, I need a margin. that makes trading ITM on expiration day not desirable.

like AAPL/goog, they ask more than 20k. gee, better trade AAPL/GOOG directly
 
Quote from trader198:

the marging requirements for option seems time related or strike related. IB does not ask me for margin for OTM in friday expiration, for ITM on friday, I need a margin. that makes trading ITM on expiration day not desirable.

like AAPL/goog, they ask more than 20k. gee, better trade AAPL/GOOG directly
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Buddy, I think you are really confused here. Every single option you buy has to be paid for...period. You cannot buy an option and not pay for it. What I think is confusing you is the notional amount of the options. For futures there is a different multiplier then with stocks. And even stocks now have mini options with a 1/10th multiplier. So when you see an option on crude oil for 1.8, you think the margin should be $180 but IB is asking for $1800. No, there is a 100 multiplier on that option. So a call that is .50 offered is not $50 but $500. ALL brokers adhere to OCC requirements for securities and exchange minimums for futures options.
 
no. you are wrong. I traded 2yrs options.

crude 1.8 means $1800. that is the same as CL.

for stock option, if 0.5, that means $50bucks. that is it. that is whyIcan trade 10000 shares of AAPL or more! otherwise options is meaningless.


if there is the same amount of deposit to back an option. I never come across that only expiration day!





Quote from Maverick74:

Buddy, I think you are really confused here. Every single option you buy has to be paid for...period. You cannot buy an option and not pay for it. What I think is confusing you is the notional amount of the options. For futures there is a different multiplier then with stocks. And even stocks now have mini options with a 1/10th multiplier. So when you see an option on crude oil for 1.8, you think the margin should be $180 but IB is asking for $1800. No, there is a 100 multiplier on that option. So a call that is .50 offered is not $50 but $500. ALL brokers adhere to OCC requirements for securities and exchange minimums for futures options.
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Quote from trader198:

no. you are wrong. I traded 2yrs options.

crude 1.8 means $1800. that is the same as CL.

for stock option, if 0.5, that means $50bucks. that is it. that is whyIcan trade 10000 shares of AAPL or more! otherwise options is meaningless.


if there is the same amount of deposit to back an option. I never come across that only expiration day!
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I still think you are confused. Let's try this again. You have to pay the entire amount of the option premium whatever that price is and whatever that multiplier is. You can call this margin or not, it's semantics. But you have to pay the total amount of the premium. It does not matter if it's expiration day or not. So if an AAPL call is .50, that is what you pay. If a CL option is 1.8, that is what you pay. You don't get to buy it for free.
 
Thank you, trader198, for teaching me about a house rule at Interactive Brokers that I was not aware of, which is discussed at at http://ibkb.interactivebrokers.com/node/1767 , paragraph 4 (just below the first chart):

"To protect against these scenarios as expiration nears, IB will simulate the effect of expiration assuming plausible underlying price scenarios and evaluating the exposure of each account assuming stock delivery. If the exposure is deemed excessive, IB reserves the right to either: 1) liquidate options prior to expiration; 2) allow the options to lapse; and/or 3) allow delivery and liquidate the underlying immediately thereafter. In addition, the account may be restricted from opening new positions to prevent an increase in exposure." [my emphasis]

This page is referred to from the page on margin for US options at https://www.interactivebrokers.com/en/index.php?f=marginnew&p=opt where it says "Please note that we do not support option exercises, assignments or deliveries which may result in an account being non-compliant with margin requirements. For additional information about the handling of options on expiration Friday, click here (Knowledgebase Article http://ibkb.interactivebrokers.com/node/1767 )." [my emphasis]

Thanks again for posting about this. It could be relevant to a lot of people's strategies.
 
of course you need pay the primum. margin is diiferent from premium, like house downpayment. beyond the premium you need pay, you need "setaside amount of money" to initiate the option trade. that is not desirable for pure option traders.


whatever, it seems you know nothing about option.

I made good money on uso 38.5put. crude 107, 106.5put.

just wish I do not need the margin for future option, I could make more today.

happy trading!





Quote from Maverick74:

I still think you are confused. Let's try this again. You have to pay the entire amount of the option premium whatever that price is and whatever that multiplier is. You can call this margin or not, it's semantics. But you have to pay the total amount of the premium. It does not matter if it's expiration day or not. So if an AAPL call is .50, that is what you pay. If a CL option is 1.8, that is what you pay. You don't get to buy it for free.
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Quote from trader198:

of course you need pay the primum. margin is diiferent from premium, like house downpayment. beyond the premium you need pay, you need "setaside amount of money" to initiate the option trade. that is not desirable for pure option traders.


whatever, it seems you know nothing about option.

I made good money on uso 38.5put. crude 107, 106.5put.

just wish I do not need the margin for future option, I could make more today.

happy trading!
More...

Options ARE margined. You are interchanging the words. The premium IS the margin. There is NOT "additional" margin on top of the premium. This is what you are confusing. There is no additional margin needed for futures options. Maybe pick up a book this weekend and get up to speed.
 
Future options do have additional margin requirements even if you purchase the option, this is because if you purchase a put you are considered to be long that instrument. If its an ES put and it goes in the money on the weekly, for instance, you will find yourself the proud owner on a long ES contract on Sun eve...and you will have maintainence margin on it. I think this is what the op is referring to.

Edit. You will be short on sun nite...i
 
Quote from emg:

buying option or selling/naked option. Buying option need not margin.




but, there is an exception, if u are a small trader, margin has meaning whether u are buying option or selling/naked option
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if the OP (small trader) believes additional money needed to cover the margin or there is a margin requirement to "buy" "long" purchase" an option before expires, then, put more money in the account.

After all, small traders are pro at reloading their account. practice, practice, practice to master the reloading technique.



Reload



More than 90% of small traders lose! They just lose!
 
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