If you have a single position IB PM account, the margin is at least 30%. Generally, the ratio improves while you add more positions. 15% (or even less) is possible for index or high-quality stock diversified portfolios. It is not necessary to be delta-neutral to reach this level. Your experience could be very different if you add a position to an empty or well diversified portfolio.
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Portfolio Margin
- Thread starter hedgex
- Start date
Portfolio margin is not hard to calculate beforehand, but you have to have extensive option knowledge as well as experience with how the OCC RBH works, which few people here posses. The problems you guys are referring to are specific to the individual broker, IB in this case. They use their own proprietary risk measures that are much more stringent than basic portfolio margin, so the problem is not with portfolio margin but with the way your specific broker implements it. I donât blame IB for being more risk adverse than basic PM permits because letting the average, inexperienced retail trader have maximum PM margin is dangerous to say the least.
This has been discussed at length in other threads here in the past.
This has been discussed at length in other threads here in the past.
I figured out how to use PM for option trading and get high leverage. At IB, the PM only looks at the underlying. So if you do a diagonal spread, sell a far term call and buy a near term far OTM call for pennies, the margin requirements all but cancel out. So PM is great for 1:1 spreads.
Is this consistent with your experience?
Is this consistent with your experience?