Margin spiked against my short puts

[zdreg]

I m good at writing otm puts and dont eant to stop doing it. Is tgere a safer way forward witha PM account?

Based upon the number of typing errors in your message, you should be very careful to avoid fat finger errors when entering orders.

 

[tonyf]

Based upon the number of typing errors in your message, you should be very careful to avoid fat finger errors when entering orders.

Thanks for reminding me of my dyslexia. People kept telling me back in school that I will never make it as well...

 

[tonyf]

Now is Schwab better than IB when it comes to option margin of small cap stocks (<$500m mkt cap)?

IB refers to this policy as Singleton Margin Method here: https://ibkr.info/tag/margin

Looking at Schwab and Trade Station, there is no reference to such a thing:
https://www.schwab.com/margin/requirements
https://www.tradestation.com/pricing/options-margin-requirements/

Does anyone here has a first hand experience of this matter?

 

[JSOP]

sucks. what was the underlying? I called IB and asked if there is some formula I can use to calculate margin requirements without having to interactively query their systems and the guy said there wasnt. There should be

There isn't. Another way of IB extracting more money from the traders. Higher margin = higher margin interest that they can charge.

 

[stochastix]

There isn't. Another way of IB extracting more money from the traders. Higher margin = higher margin interest that they can charge.

Their margin rates are rock bottom low compared to most other brokers last I checked last month when I did a comparison

 

[stochastix]

the poster could have considered hedging his short puts by purchasing deeper out of the money calls (or perhaps puts) on the same or next expiration, then as the trade went against him the appreciation in value of the long calls should have offset the losses on the short puts in such a way as to not trigger a forced-liquidation.

 

[JSOP]

the poster could have considered hedging his short puts by purchasing deeper out of the money calls (or perhaps puts) on the same or next expiration, then as the trade went against him the appreciation in value of the long calls should have offset the losses on the short puts in such a way as to not trigger a forced-liquidation.

Yeah but unless the hedging calls were closer in strikes to the puts which would eat in the profits, they won't offset much to the required margin. I have tried that. The issue here with IB is its transparency. If you are going to increase the margin on me due to this, due to that, I want to know why and how. I want to see formulas of how you calculated that and why you think it's justified. But nothing. And this is what bothers me the most about IB. You are basically operating at their whims. Today it feels like increasing your margins, it will push it to the point of your position being in margin calls or hefty margin interest. Tomorrow if it feels your position is "too concentrated", it will charge you "exposure fees". I got charged $50 interest for no reason in Aug. I have sent them a message via their message centre asking for an explanation and it's been 2 months and I am still waiting for a response.

This is not what I signed up for. I want to be in full control of my trading. The market and market alone should be the one who decides whether and by how much I can profit not a broker through something that I have no control over and don't even know why by their "black box" crap that they are not willing to disclose.

 

[zdreg]

Yeah but unless the hedging calls were closer in strikes to the puts which would eat in the profits, they won't offset much to the required margin. I have tried that. The issue here with IB is its transparency. If you are going to increase the margin on me due to this, due to that, I want to know why and how. I want to see formulas of how you calculated that and why you think it's justified. But nothing. And this is what bothers me the most about IB. You are basically operating at their whims. Today it feels like increasing your margins, it will push it to the point of your position being in margin calls or hefty margin interest. Tomorrow if it feels your position is "too concentrated", it will charge you "exposure fees". I got charged $50 interest for no reason in Aug. I have sent them a message via their message centre asking for an explanation and it's been 2 months and I am still waiting for a response.

This is not what I signed up for. I want to be in full control of my trading. The market and market alone should be the one who decides whether and by how much I can profit not a broker through something that I have no control over and don't even know why by their "black box" crap that they are not willing to disclose.

Your negative attitude towards your broker affects your bottom line.

 

[tonyf]

Your negative attitude towards your broker affects your bottom line.

Now that last statement is surprisingly true actually.
But should not curtail an investor from understanding counterparty risk modelling.

I am OK paying more in overnight margin rates and have less margin if another broker gives me better parameters on variations from OCC margin levels.

 

[jys78]

the poster could have considered hedging his short puts by purchasing deeper out of the money calls (or perhaps puts) on the same or next expiration, then as the trade went against him the appreciation in value of the long calls should have offset the losses on the short puts in such a way as to not trigger a forced-liquidation.

How do you propose a long call hedges a short put?