How to write call options at IB?

[arilou]

Hi just21,

No, it is an old account (more than one year old, if it counts as "old" ). And I use only the base currency.

 

[intradaybill]

Quote from arilou:

But when I have sold an option, I am not forced to buy it back in the future, so why does my P/L depends on the current price of the option? What I am oblidge to do is to sell the stocks, if required. But that will be a different transaction, and should be a different item on my balances sheet (at least I think so).

Do you have the stock? If this is not a covered option then IB will have to get you out the trade if you are called. The changing P/L is what it will cost real-time to get you out.

If it is covered, you get your premium

 

[arilou]

Quote from intradaybill:

Do you have the stock? If this is not a covered option then IB will have to get you out the trade if you are called. The changing P/L is what it will cost real-time to get you out.

If it is covered, you get your premium minus your loss from when you are called to deliver at the strike price.

That is the point and that is what I do not understand.

I dont want to do it naked. I do have the stock. But I cannot see my premium anywhere! It seems I bought the necessary stock, I sold the call option, and I only have the loss for the spread and commission, and I cannot see the premium.

So did I oblige myself for nothing?? It seems so from my balance sheet.

In fact, I placed a Buy Write order, which means that I buy the necessary stocks and sell a call option at the same time. But the premium is nowhere!

 

[total_keops]

RTFM

Combination Type:
Covered Calls and Puts

Short an option with an equity position held to cover full exercise upon assignment of the option contract.

Margin Accounts: IB Initial
Initial stock margin requirement + 100% of in the money option value. Short sale option proceeds are applied to cash.
Same rules as cash for IRA Margin Accounts

Margin Accounts: IB Maintenance
Stock maintenance margin requirements + 100% of in the money option value.

Cash Accounts: Covered Calls
Stock paid in full.

Cash Accounts: Covered Puts
N/A

http://www.interactivebrokers.com/en/p.php?f=margin&ib_entity=llc

 

[Maverickz]

Quote from arilou:

That is the point and that is what I do not understand.

I dont want to do it naked. I do have the stock. But I cannot see my premium anywhere! It seems I bought the necessary stock, I sold the call option, and I only have the loss for the spread and commission, and I cannot see the premium.

So did I oblige myself for nothing?? It seems so from my balance sheet.

In fact, I placed a Buy Write order, which means that I buy the necessary stocks and sell a call option at the same time. But the premium is nowhere!

I do not use IB so I don't know the specific screens but the premium received should show up in your available cash. The P/L is constantly changing to show what gain/loss you would lock in if you liquidated your position at that point.

I do also want to reiterate what others have said though. You need to learn a LOT more about options before trading them or you are going to blow your account. You need to understand what the Greeks are and how they affect the outcome of your trade. You need to know what Volatility and Implied Volatility are and how they affect options pricing. You need to understand Open Interest, what happens on expiration, when expiration is, and more. Options are probably the most complex thing you can trade and certainly not something you want to be trading if you have no real understanding of how they work.