IB Margin Problem

Quote from zdreg:


unfortunately the OP cannot expect an answer if refuses to state his orginal position and then the sequence of transactions. the minute people use the word weird about a broker the suspicion is the person doesn't understand the rules.
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Yes, without the specifics it's hard to tell.

OP does not state the exact expiry. It is possible that he is using weeklies to hedge monthly, hence the margin treatment.
 
Quote from zdreg:

the reason it is radical because the op is trying to be conservative in his actions.
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You don't have to use excess leverage just because it there.
 
Quote from chucksil:

Well, zdreg, you would lose that bet. Simply put, I was short 120 OCT SPY calls between 123 and 130, and long 120 OCT SPY calls between 124 and 131. I recently opened up some Nov credit spreads on SPY - short 60 NOV SPY calls, and long 60 NOV calls. The margin required is a very simple calculation - the difference in the strike prices, because every short call is covered by a long call.

Re-read my OP - IB told me that they used 20 of the long NOV calls to cover 20 of my short OCT calls, which left 20 of my short NOV SPY calls naked, and 20 of my OCT long calls doing nothing!
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did you attempt to close the oct. spread by selling the higher price calls first?
" I tried to close some SPY OCT call credit spreads for a loss, and TWS would not let me, saying that it would increase my margin deficit."
 
Quote from stock777:

Why are they using 20 of the long NOV calls to cover 20 of the short OCT calls????
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That's a long calendar call spread. Why would he not do that?
 
Quote from chucksil:

Well, zdreg, you would lose that bet. Simply put, I was short 120 OCT SPY calls between 123 and 130, and long 120 OCT SPY calls between 124 and 131. I recently opened up some Nov credit spreads on SPY - short 60 NOV SPY calls, and long 60 NOV calls. The margin required is a very simple calculation - the difference in the strike prices, because every short call is covered by a long call.

Re-read my OP - IB told me that they used 20 of the long NOV calls to cover 20 of my short OCT calls, which left 20 of my short NOV SPY calls naked, and 20 of my OCT long calls doing nothing!
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Rolling the so called unused 20 Oct calls to Nov probably would have solved the problem but you shouldn't have to do that if your long and short calls per month pair up evenly.

Can you elaborate on why IB's software did this? What were the details of IB's explanation? Why isn't it a covered situation?

It just doesn't make sense... and if true, really sucks.
 
Either OP isn't disclosing everything or there's a glitch with TWS margin calcs.

Hmmm...I wonder which one is more likely?

Given that OP's massive prior posting history deals mainly with not understanding the logic of "liquidate last," I'd give the nod toward him.

The lack of posting history is interesting. Any other nicks?

There's been a lot of IB bashing lately, so hopefully either OP or IB clears this up.
 
Quote from zdreg:

that is a pretty radical solution even if u should turn out to be right.
unfortunately the OP cannot expect an answer if refuses to state his orginal position and then the sequence of transactions. the minute people use the word weird about a broker the suspicion is the person doesn't understand the rules.
More...


+++++1
specially it is true for IB.
 
I recently had a similar problem and what is happening was enlightened to me. You have a soup of options in your portfolio. The system will automatically determine what the optimal combination of spreads will reduce the required margin. Sometimes the algo fails. I bet you saw the margin and over extended yourself. You can cross the limit real fast under reg t even if you had a lot of margin capacity before.

I bet you didn't understand what the margin capacity was and took ib at it's word.
 
Portfolio margining with IB has its own problems too.

for instance when you simply buy a call option under Reg-T then the cost of this option is substracted from your cash and you are NOT using any margin. But with the portfolio margining there is a margin requirement for the call option even after the cash substraction.

clearly these differences do impact how you manage your liquidity...
 
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