Brokers with low margin requirements on naked calls?
- Thread starter fgopc1
- Start date
Robert Morse
Sponsor
I'm more of an expert on PM than Reg-T. As a blanket statement, I would NEVER tell a client or perspective client that we will NEVER raise margin or limit risk in the future. I did business with Apex at my last firm. We do business with Wedbush now. Your clearing broker and when you have one, your introducing broker, have the right to increase requirement when necessary.
Make whatever conclusion you want from that statement about what Tastyworks has told you. Think back to 2009. Do you think requirements on option in a Reg-T Account on bank stocks were higher or stable? IVOL was over 200. That is implying 12% to 13% move each day,
Make whatever conclusion you want from that statement about what Tastyworks has told you. Think back to 2009. Do you think requirements on option in a Reg-T Account on bank stocks were higher or stable? IVOL was over 200. That is implying 12% to 13% move each day,
I think one of the biggest concerns is Margin fee.. what are they charging you..
clearly IB has an advantage offer such low rates that going to another competitor could double that rate or even almost triple it !!!
I can't find a better solution then IB as the margin rate is so incredibly low.
to bypass some of this margin requirement, I have been experimenting with spreads, to leverage out even more ( yes some will laugh and shake their head, but it's a way to pull more in if we are stuck playing by rules of 30% drop tests ), it's also in a way "safer" then naked and doubles to control not hitting nasty expense fees or even possibly a liquidation in a hard fast drop if you are already at max line with margin... something I would think about, as were all in the same gambler boat.. how to bring in more, so there is one way
clearly IB has an advantage offer such low rates that going to another competitor could double that rate or even almost triple it !!!
I can't find a better solution then IB as the margin rate is so incredibly low.
to bypass some of this margin requirement, I have been experimenting with spreads, to leverage out even more ( yes some will laugh and shake their head, but it's a way to pull more in if we are stuck playing by rules of 30% drop tests ), it's also in a way "safer" then naked and doubles to control not hitting nasty expense fees or even possibly a liquidation in a hard fast drop if you are already at max line with margin... something I would think about, as were all in the same gambler boat.. how to bring in more, so there is one way
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I call it margin fee ( costs to borrow ).. call it what you like. I don't even know the proper term I guess.. ( margin interest ?? ) I know it sucks money out of my account
It should only be sucking away available margin buying power.
In that sense, I guess what you are being charged is just the cost it would take to get a loan (from a bank) to regain that margin power. Which is very person dependent and might not even be possible. Point is I'm trying to optimize for minimal margin BP consumed.
In that sense, I guess what you are being charged is just the cost it would take to get a loan (from a bank) to regain that margin power. Which is very person dependent and might not even be possible. Point is I'm trying to optimize for minimal margin BP consumed.
I think we are confused.. I'm talking to keep in mind costs to borrow out this margin ( margin interest I believe is the actual terminology ) .. what I'm saying is this is as important as how much margin you are carrying, as it's in direct line to how much you borrow out is how much you will get charged..
I say this as I see people gripe ( myself included ) how much we can borrow out, but some of these people are getting charged double then using say IB.. which to be honest is less at the end of the month even if you can pull in a few more contracts, it's eaten away by the borrowing costs... there's a great app to calculate this.. It's called, interest calculator..
once again, an option is to use spreads, they reduce margin requirement quite a bit I've found, and you can actually pull in more premium then naked calls.I would like to hear others though as we are all in the same boat.. we want more premium ... who doesn't
I have thought of another option, and haven't calculated it fully is by doing two sets of spreads, then with the "other set" , buy options with the premium you bring in, I believe this would offset that second set you really shouldn't do to keep margin in check if we are talking credit spreads on puts.. but should balance it out a lot cleaner and thus you retain wash sale cost basis for next purchase on the lost buy sale you did to protect the margin better??? any thoughts guys on that
I say this as I see people gripe ( myself included ) how much we can borrow out, but some of these people are getting charged double then using say IB.. which to be honest is less at the end of the month even if you can pull in a few more contracts, it's eaten away by the borrowing costs... there's a great app to calculate this.. It's called, interest calculator..
once again, an option is to use spreads, they reduce margin requirement quite a bit I've found, and you can actually pull in more premium then naked calls.I would like to hear others though as we are all in the same boat.. we want more premium ... who doesn't
I have thought of another option, and haven't calculated it fully is by doing two sets of spreads, then with the "other set" , buy options with the premium you bring in, I believe this would offset that second set you really shouldn't do to keep margin in check if we are talking credit spreads on puts.. but should balance it out a lot cleaner and thus you retain wash sale cost basis for next purchase on the lost buy sale you did to protect the margin better??? any thoughts guys on that
Part 2 of this thread is here:
Broker that will allow writing covered calls on equity held elsewhere?
- The OP is interested in covered calls.
- The shares at one broker.
- The short calls at another broker.
The dilemma is how to get both brokers on board.
There's no 'dilemma.' He just needs to call the custodian holding his long stock and ask what's involved in pledging it.
Yes ...... That appears to be an obvious solution. But the problem still appears to be unsolved.