Broken Wing Butterfly margin at IB

Kibitzer said:
With portfolio margin in ToS, a long SPX fly 2050/2025/1990 has a margin requirement (excluding initial premium) of $1,000, as it should be.
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I misread it. your are right. the max loss is 1,000.
I am surprised IB would get that calc wrong - normally for reg-t they have algos to pair the options and stocks to their most optimal margin configuration.
 
Bekim said:
Are you sure it says it that way in a pnl graph but it can calculate the margin differently elsewhere?
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When I put on a simulated position, it shows the margin requirement as such. Again, I have portfolio margin, and it looks at +/- % distance from current price to determine margin requirement.

With reg-t in ToS, I am not sure what the margin requirement is. You can call them - their customer service is good.
 
I don't know why they don't change this it makes not sense for them and for me. I trade less because my margin is eaten up for no reason.
 

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stevegee58 said:
I trade BWBs on IB all the time. The margin used is the max risk which is the difference between the widths.
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Agreed. (And in this case, that is the $1,000 uncovered exposure). As well,
1) the other side of the market can be written w/o (net) margin impact, and
2) margin will be allocated "afresh" for each expiry.

Thus, write a 95/80/70 put-side bwb for Sep09, and you can write another, call-side bwb at 10/15/25 without margin impact, but
If you write that 10/15/25 bwb instead for Sep15, and you will see a new $margin allocation.

For myself, I determine how many $5 "slots" of margin I wish to allocate for any given expiry, and keep strict track of what is allocated, and *what balance* I maintain, of margin consumption, top and bottom.
 
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