Day Trading Margin Call, Options

F

FSU

Any experts in Day trading margin requirements?

Trading through a PM account at Apex, this is what they are telling me. If I trade a time spread with very expensive options, say I buy a $210 call and sell a $200 call 10x. My maximum risk would be $10,000 and if I left the position on overnight it would have a small effect on my margin. If I day trade the spread they are looking at it as a total of $410,000! ($200,000 dollar value on the short and $210,000 dollar value on the long). So I would need the full $410,000 in the account. If I only had $300,000 I get a $110,000 day trading call.

If I trade day trade the spread as two separate 5 lots, it would use only $205,000 each trade and day trading power would "reset" after each closing and opening trade, so I could day trade the spread an unlimited amount of times if I did it 5x each with $300,000 in capital.

This seems to make no sense to me, but that is how Apex is treating it. Has anyone else had any other experiences?
 
An update on this issue for anyone interested. Apparently in a PM account, there is no multiple of equity buying power for options (only for stock). So if you buy a 20 lot of a 100 option and sell it out the same day, you will need to have $200,000 in your account. When doing option spreads, the individual options are looked at, so if you buy a time spread for $1 10 times, but the option prices are 201 and 200, you will need $401,000 in your account (if you sell it out the same day).

Note that this doesn't seem to apply to a Reg T account, only a PM account.
 
FSU,

It makes sense that there is no offset for option spreads for DT calculations. Margin is risk based not DT. Your option DT calculations are correct.

Bob
 
You must log in or register to reply here.
Back
Top