E-mini option margin

[levijean]

Interactive brokers requires about $10,000 margin to write an ES put. I dont have a funded account with Thinkorswim but the papertrader shows about $4,000 required margin when I enter the same order. Is that correct?

 

[Robert Morse]

Interesting that it is more than a future. Is this an IRA?

 

[levijean]

Not an IRA.

But I just noticed TOS has very limited order types for FOPs so I guess that is a reason to stay put.

https://tlc.thinkorswim.com/center/reference/orders.html

 

[levijean]

Yes the margin required for an Emini is $3692 but the margin required to write a put is $9958. Am I missing something?

 

[Robert Morse]

SPAN margin initial margin for ES is $5500 and Maintenance margin is $5000. Options should vary but should never be more than the future.

 

[Steven Leeds]

Interactive brokers requires about $10,000 margin to write an ES put. I dont have a funded account with Thinkorswim but the papertrader shows about $4,000 required margin when I enter the same order. Is that correct?

As Mr. Morse pointed out the CME's margin requirements for the ES contract is $5000.

I only trade vertical spreads and the margin requirements are, due to SPAN, much less. Here's a screen shot from my ToS account this morning. I have an ES Iron Condor in the works, 8 total contracts, and the margin is $466.00. It changes up and down a little as the underlying (ES) price changes. If I remove one leg by taking profits, the margin will stay the same. The SPAN system knows that in the case of an Iron Condor the risk will be on one side or the other so it margins the side with the most risk not both sides. More on that here;

Chttps://www.cmegroup.com/clearing/files/span-methodology.pdf

I highly recommend spreads. Lower risk, lower margins, (and lower return). I would rather hit a bunch of singles than a couple of home runs. But that's my trading strategy, yours may vary. All I know is I don't like facing big margins when I can have little margins.

Best

 

[levijean]

According to IB, they "margin futures and FOPs differently"...

 

[Robert Morse]

We use SPAN margin

 

[MattZ]

ADM Portal allows to see the margin on each product as dictated by the CME SPAN.
If you provide the strike price and month, I would be able to look up.
This is also available to you as a customer.
You can even do multiple strategies to see the precise margin.

 

[Chubbly]

I came across a very similar issue which I created a thread here

https://www.elitetrader.com/et/thre...-ib-margin-calculator-and-support-are.306919/

IB doesn't use SPAN, they use their own house margin and will set it whatever they please. Even if it makes absolutely no sense at all. In my thread I should how they wanted 13,000$ margin for a vertical debit 10 point spread on the emini. While ToS showed a requirement of $187 for the same spread.
Customer service said it was correct and not an error.......