Option margin calculator for Reverse Conversion (and other strategies)

[Vladimirsnap]

Good day!

Could you help me to find option margin calculator for this strategy?
CBOE Margin calculator doesn't have this one.

And another question. Is it possible that different brokers have completely different margin calculation for option strategies? Could you recommend some with a minimal margin?

 

[rmorse]

It is not clear to me how, as a customer, you can make money with Rev/Con trades, but I'm happy to discuss this with you if you email me your contact information. Margin is a Portfolio Margin account for this is nominal but your cost of carry will be higher than a bank desk or market maker.

Bob

 

[Dael]

Login to CME CORE personal account (free to register), then go to Margin Calculator. All calculations are made via SPAN margin.
http://www.cmegroup.com/clearing/cme-core-cme-clearing-online-risk-engine.html

Ask a question in the broker support. The question is 'Are your margin requirements calculated with SPAN engine?'. That's it.
NB. IB is not in the list os SPAN margin brokers.

 

[rmorse]

Login to CME CORE personal account (free to register), then go to Margin Calculator. All calculations are made via SPAN margin.

I think this is an equity option question. If it is, the OCC website would be better http://apps.theocc.com/pmc/pmc.do

Because PM is risk based, it will likely be the minimum calculation of $37.50/options but your clearing broker can ask for more. This strategy will not be margin efficient in a Reg-T account.

 

[Vladimirsnap]

Thank you!

Yes, it is a equity options.
And for Rev/Con strategy it isn't a lot of margin requirement because position has a delta near 0.

 

[rmorse]

And for Rev/Con strategy it isn't a lot of margin requirement because position has a delta near 0.

Correct, but don't confuse zero delta with zero risk.

 

[Vladimirsnap]

Agree about risk

With NAV about 10k calculator (http://apps.theocc.com/pmc/pmc.do) shows $200 margin.
very good!

 

[Buy1Sell2]

Correct, but don't confuse zero delta with zero risk.

This is a correct statement.

 

[JackRab]

It is not clear to me how, as a customer, you can make money with Rev/Con trades...

Yeah, I've seen questions about conversions and reversals before... there's absolutely nothing in there for retail traders. The fees alone will make this a losing trade...

Unless you're trying to evade taxes on dividends, but reversals usually already trade below the gross dividend.

Maybe... you're holding stock which has a high short stock rate and trying to get a bit of that action through long synth selling your stock balance?

 

[Buy1Sell2]

Yeah, I've seen questions about conversions and reversals before... there's absolutely nothing in there for retail traders. The fees alone will make this a losing trade...

Correct. Too many sides to take into account cost-wise.