I have traded futures in the past but have recently started studying options and finally decided to make my first purchase just to get familiar with how to enter the orders and such, anyway, it is a put butterfly spread on SPX 5 points wide, it was very cheap (it is a low probabilty trade) The debit was .25 for 1 butterfly. Everything was fine until the next day, I'm trading with TD ameritrade TOS, and noticed after I logged in that there was a warning in red text stating 'Regulation T Call $$$.$$' This is a margin account, opened with $5,000 ($10,000 available with margin). Shouldn't this be enough to cover any maintenance margin on this trade? My max risk is only the the $25 dollars I spent. Even if they calculated the differnce in strike prices and used that as margin requirement its only 5 points ($500). Am I completely wrong about this?
Reg T call for first option purchase
- Thread starter knifeParty
- Start date
Robert Morse
Sponsor
What option level are you approved for? Maybe you are not approved for spreads.
I suspect Robert is correct!
You should have at a minimum:
For margin, and option trading. (Above from one of my TDA accounts)
You should have at a minimum:
For margin, and option trading. (Above from one of my TDA accounts)
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I'm approved for Tier 2 Standard margin account which allows me to trade any type of option including spreads, but I cant trade naked options.
that reg t thing is just an error in the system , call td and ask them
stepandfetchit I just checked and all you listed is the same for my account. I'm going to call TD in the morning and find out why. Thanks for your fast responses though
Robert Morse
Sponsor
Maybe, maybe not. It is not uncommon for a new option account to be set up wrong. The call might be a mistake. BTW, If you bought a butterfly spread on SPX, the strikes are all 5 points wide. That means that it can't be a $1.00 fly. It has to be in increments of 5 points.
Been there done that...
Though I placed trade X. When I actually placed trade Y.
TDA/TOS does not "slap you hand" for improper orders as much as you may think or wish! (They have some "undocumented features" that can create some trades that are quite surprising ;-) )
Though I placed trade X. When I actually placed trade Y.
TDA/TOS does not "slap you hand" for improper orders as much as you may think or wish! (They have some "undocumented features" that can create some trades that are quite surprising ;-) )
In my original post I did say it was 5 points wide, but I only bought 1 spread. 2160/2165/2170
Robert Morse
Sponsor
I see that now. I did not read it that way the first time.
May I ask why you have a futures account, and could have done the same spread in ES, but your choose to try SPX? A PM account with SPX might or might not be a little better (Margin&fees) than ES in a futures account, but with Reg-T, I don't see the advantage unless you are going to trade equities and equity options or some symbols not available in futures like ETFs.