SPX Credit Spread Trader

Quote from volatilitypimp:

DO NOT use IB for credit spreads(IC's) they will charge you margin for both sides of the IC. Thus, an 8% return for the month will be halved to 4%.(yeah, you get better commisions but terrible margins, and don't me started on their custome service)

I think OX, and I know TOS only charges one side of the IC, which is risk based because you can actually only lose on one end. Not too sure about TK.
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That is completely incorrect. IB uses proper margining.
 
Quote from def:

That is completely incorrect. IB uses proper margining.
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How long has IB been margining a single side for IC's?

My brother used to work on your desk there at IB(it was several yrs ago). He would tell me stories about customers calling in furious about the amount of margin u used to charge.
 
Quote from volatilitypimp:

How long has IB been margining a single side for IC's?

My brother used to work on your desk there at IB(it was several yrs ago). He would tell me stories about customers calling in furious about the amount of margin u used to charge.
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IB uses SPAN to calculate margin. Perhaps several years ago we didn't impliment all spreads at the lowest possible rates but we do now.
 
Quote from def:

That is completely incorrect. IB uses proper margining.
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Following is a response I received directly from IB yesterday:


Dear Trader,

Please see the following link which describes IB's margin requirements for various option positions.

http://www.interactivebrokers.com/en/trading/marginRequirements/stockIndexOptions.php?ib_entity=llc Please note that Interactive Brokers utilizes option margin optimization software to try to create the minimum margin requirement. However, due to the system requirements required to determine the optimal solution, we cannot always guarantee the optimal combination in all cases.

The option margin optimization software currently in place is designed to recognize Iron Condor spreads and assess the account the margin requirement for either the call spread or the put spread but not both.

If you have any further questions, please feel free to contact us again.

Regards,

Rick V
IB Customer Service
 
Boyo, I Take a Day Off... and I miss a multi-cultural trading experience. Only here on EliteTrader.com


Coach,

With your contacts within the REAL world, it may be of interest to host an online meeting about setting up LLC's, C-corps, etc. for trading. Outlining the advantages / disadvantages, etc.

The interest may spur a directional change for many.

Your thoughts appreciated,

Murray
 
Quote from volatilitypimp:

Well now, I guess I stand corrected on that point.

I still think their little red icon stick figure is giving us all the middle finger. :D
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Read the reply carefully. You are not correct. I'll spell it out...

On a condor the max risk is one spread not both and thus will margin only ONE spread. This is correct and offers optimal margin.
 
Quote from Sailing:

Boyo, I Take a Day Off... and I miss a multi-cultural trading experience. Only here on EliteTrader.com


Coach,

With your contacts within the REAL world, it may be of interest to host an online meeting about setting up LLC's, C-corps, etc. for trading. Outlining the advantages / disadvantages, etc.

The interest may spur a directional change for many.

Your thoughts appreciated,

Murray
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That might be an interesting discussion. Having studied finance and business, I get pretty frustrated with the misconceptions out there about double taxation etc. that cause people to set up their business in a way that puts them at a disadvantage, especially concerning taxation. And we all know in this business that tax advantages are key.
 
Quote from def:

Read the reply carefully. You are not correct. I'll spell it out...

On a condor the max risk is one spread not both and thus will margin only ONE spread. This is correct and offers optimal margin.
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Chill out def. I admitted that I was wrong in the previous post. My bad.
 
Quote from volatilitypimp:
In my experiance with IB if you enter a IC as one trade or even leg into it with only a few days in between spreads you will only be charged margin on one side but more then 5 days between spreads and its not a sure thing at all.... but it has been 6 months since I traded any options with IB so things may have changed.

Also as of 6 months ago IB charged full commison for orders that you cancel...which for me was at least a small consideration as I jockey to get filled at best price.

Of course commisons are probably the least improtant part of the whole equation but every little bit helps 8)

Chill out def. I admitted that I was wrong in the previous post. My bad.
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