IB post expiry margin question

[robert111]

Hello, I have 3 calendar spreads on ES futures open. They are using options expiring on Nov. 21st & 23rd and are currently out of the money. Current margin is around $300, but it shows post expiry margin of $4900. This does not make sense to me. Why would post expiry margin be so high. Assuming price stays the same, the 21st options would expire worthless, and I would be long the 23rd options. I can't understand why just being long a couple cheap options would have such a high margin requirement, unless the system at IB is making a mistake in its calculations.

 

[tommcginnis]

Hello, I have 3 calendar spreads on ES futures open. They are using options expiring on Nov. 21st & 23rd and are currently out of the money. Current margin is around $300, but it shows post expiry margin of $4900. This does not make sense to me. Why would post expiry margin be so high. Assuming price stays the same, the 21st options would expire worthless, and I would be long the 23rd options. I can't understand why just being long a couple cheap options would have such a high margin requirement, unless the system at IB is making a mistake in its calculations.

If you're not watching those longs, and they end up ITM, you will be assumed to be a buyer, and IB as your broker wants your account ready.

 

[ktm]

What were the positions and where was the market when you saw that?

Most of the time the IB algo is correct on the lookahead margin, but I've had a few cases where it was way off.

 

[Sig]

Hello, I have 3 calendar spreads on ES futures open. They are using options expiring on Nov. 21st & 23rd and are currently out of the money. Current margin is around $300, but it shows post expiry margin of $4900. This does not make sense to me. Why would post expiry margin be so high. Assuming price stays the same, the 21st options would expire worthless, and I would be long the 23rd options. I can't understand why just being long a couple cheap options would have such a high margin requirement, unless the system at IB is making a mistake in its calculations.

If you aren't already aware of it, IB will auto liquidate those positions even if they aren't ITM, starting in my experience the day before the expiration, using the assumption that you have to have the full amount required to buy/sell the underlying ES contracts in your account. The autoliquidation isn't pretty, they submit a market order to sell your positions and you get what you get when it comes to the fill, so something to be avoided if possible.