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Interactive Brokers would not allow me to exercise
- Thread starter Robert Weinstein
- Start date
Quote from traderwin:
Thanks Robert,
By the way, do you know what kind of margin IB would apply for reverse conversions?
I checked here:
http://www.interactivebrokers.com/en/p.php?f=margin
But it seems hard to believe that, under a Reg T account, the margin should be everyday:
In the Money Put Amount + Initial Stock Margin Requirement
(I understood maintenance margin is not very relevant to consider if you intend to keep the position overnight).
This kind of position should have a fixed margin requirement, like 10% * strike, not something dynamic (and high)...
Even the account is under Portfolio margin I guess Reg T gives an idea of the worst case scenario.
Your insight on this is appreciated!
IB's margin requirements for a reverse conversion is correct. You need to meet the initial requirements on trade date, then afterwards you have to maintain 10% of the strike + ITM amount if any.
Thanks johnnyc,
When you say that once the position is established, we have to keep the ITM + 10% * strike afterwards, do you mean that there is no overnight Reg T margin requirement (= initial margin requirement) for this kind of trade (which is of course much higher than the ITM + 10% * strike amount)?
When you say that once the position is established, we have to keep the ITM + 10% * strike afterwards, do you mean that there is no overnight Reg T margin requirement (= initial margin requirement) for this kind of trade (which is of course much higher than the ITM + 10% * strike amount)?
Quote from johnnyc:
are you back crying again? Still trying to figure out what the OCC does? Yep, the CBOE went public. I suppose you think the members didn't get any stock when that happened?
You suppose I think the members didn't get any stock? Ok, I think that effectively demonstrates your cognitive ability for all to see.
Care to disclose what you do in the marketplace? Might that reveal your motivation to attack someone who is trying to improve the trading opportunities for people on this board / retail traders?
Most people on ET that trade options or would like to would benefit from being able to trade on a level playing field. So thank you for helping to keep this thread alive and on top so more people can see it.
Quote from traderwin:
Thanks johnnyc,
When you say that once the position is established, we have to keep the ITM + 10% * strike afterwards, do you mean that there is no overnight Reg T margin requirement (= initial margin requirement) for this kind of trade (which is of course much higher than the ITM + 10% * strike amount)?
You have to meet Reg T on trade date. Yes, that would be higher. You pay for the call in full, to short the stock it would be 150% (100% of which can be met from selling the stock) and no requirement on the short put unless it's ITM then you would add the ITM amount to the RT requirement on the short stock. The next day your requirements would drop down to the maintenance requirements of 10% of the strike + ITM amount.
Quote from Robert Weinstein:
You suppose I think the members didn't get any stock? Ok, I think that effectively demonstrates your cognitive ability for all to see.
Care to disclose what you do in the marketplace? Might that reveal your motivation to attack someone who is trying to improve the trading opportunities for people on this board / retail traders?
Most people on ET that trade options or would like to would benefit from being able to trade on a level playing field. So thank you for helping to keep this thread alive and on top so more people can see it.
I don't know what you think or know.
In the marketplace I buy and sell from time to time. If your wish of the "level playing field" were to come true it would not impact me in the slightest bit.
Most people on this forum that I have seen are intelligent or people that want to learn. All I've seen you do here is whine and cry.
Quote from johnnyc:
You have to meet Reg T on trade date. Yes, that would be higher. You pay for the call in full, to short the stock it would be 150% (100% of which can be met from selling the stock) and no requirement on the short put unless it's ITM then you would add the ITM amount to the RT requirement on the short stock. The next day your requirements would drop down to the maintenance requirements of 10% of the strike + ITM amount.
Thanks Johnnyc, so just to make sure I understand properly (because this is not really what I heard from IB staff), you say that Reg T "End of Day" will never need to be met again after the first night the position is established?
Quote from traderwin:
Thanks Johnnyc, so just to make sure I understand properly (because this is not really what I heard from IB staff), you say that Reg T "End of Day" will never need to be met again after the first night the position is established?
correct, that is how it should work and is what they have listed on their site. What did IB staff tell you?