Options margin question

[zdreg]

If you don't have anything useful to say, please don't respond. I understand options very well. As long as you close a reverse calendar before the long leg expires, you are covered quite well with much less risk than many other option strategies. Hence the much lower margin requirement when you open the position. It only becomes much riskier if you go past expiration and continue to hold short naked options.

If you don't have anything useful to say, please don't respond. I understand options very well

self serving remark should have been left out of your response. you have a short fuse. it will not serve you well in trading.

 

[Overnight]

...I understand options very well. As long as you close a reverse calendar before the long leg expires, you are covered quite well with much less risk than many other option strategies...

If you understand options very well, then why are you asking the question?

 

[darp]

The CME exchange required SPAN margin is not $9500 and the same for 1 ES contract, which is under $5000. This is your broker adding their own risk component. For accounts of $25,000 or more, we introduce futures accounts to Wedbush Futures that uses SPAN margin. To monitor risk, each symbol requires approval for a max order size and max position size. I have had no problem getting reasonable limits and with some platforms, getting lower margin for day traders.

Why don't you email me your contact information and I'll give you a call later.

Bob

Hi Bob, I put a trade on IB for a stock at 38 (atm roughly) a reverse Calendar spread and it seems to be using up abou $2000 of margin to my shock as maybe $70 max risk. I went into Etrade margin calculator and


Open Calls
Fed Call 0.00 -777.78 -777.78
House Call 0.00 -194.00 -194.00
Purchasing Power
Marginable Securities 5.42 -3,892.54 -3,887.12
Non-Marginable Securities 5.42 -1,633.50 -1,628.08

Again maybe $70 risk but both brokers want arm and leg margin, even though a std cal sprd has just about the same risk and yet say $70 margin requirement.

What would your firm require for margin on a $38x $38 rev cal sprd?

 

[Robert Morse]

I assume this is a reg-t account and you sold the Longer dated option and bought the shorter dated option? Most brokers don’t recognize that as a full hedge in a reg-t account. I expect we are not much better. To get a real number, I need you to send the the exact spread with the cost of each leg to my email and I can have soMeone run that for me. I can only do PM as I know how to do that.