suffering from margin call constantly

[Buy1Sell2]

When it comes to IB, that is not true. They are a F-you-at-drive-thru place. This is based on reports I have seen from other posters here that use IB.

As soon as the market closes and you haven't exited positions, the margin goes up.

 

[weij]

Day margins are quite a bit less than overnight margins.

Again, what do you mean by "overnight margins" here? Is it a term used by IB or just the same behavior as I described in my OP? Is there any way I can see the actual number, or at least something close, of such "overnight margins" before the market close?

 

[Buy1Sell2]

Again, what do you mean by "overnight margins" here? Is it a term used by IB or just the same behavior as I described in my OP? Is there any way I can see the actual number, or at least something close, of such "overnight margins" before the market close?

More collateral is needed to hold positions overnight.

 

[weij]

As soon as the market closes and you haven't exited positions, the margin goes up.

Any theory backs up / justifies your claim? In what situation an option would cause more potential loss over night? If so, can such change be predicted in the previous day before the market close?

 

[Overnight]

As soon as the market closes and you haven't exited positions, the margin goes up.

And when the market reopens at 6PM ET? AMP says it goes right back to day trading margins, since the day starts at 6PM. It is a horrible conflation of terms. I hate it all. Oh, and don't get me started on "initial margin." OY!

 

[weij]

I got following from IB. Some generic info that might be helpful to someone here:

Customer Portfolio Margin System ("CPM") was developed by The Options Clearing Corporation ("The OCC") to support portfolio-based margining of customer accounts. Based on the TIMS margin methodology, CPM takes an OCC generated master file of profit and loss values and a user generated position file as input. The TIMS methodology is then applied to generate a margin computation that can be viewed via hypertext pages from the account down to the position level.

https://www.theocc.com/risk-management/customer-portfolio-margin​

Also, anyone know what is in the OCC generated master file? There seems a link in IB web page, but it is dead.

 

[smallfil]

Are you trying to say the time decay of a long option? Yes, the OTM options would usually expired with no value. As I mentioned in an other post in this thread, the over all theta is positive. So they are some cost I'd like to take for the protection, and also hopefully to lower the margin. The latter is not taken well by IB though.

OTM options are also, called lottery plays because it is like playing the lottery, hoping somehow to win. You are getting margin calls because you do not have enough monies to cover all your obligations. When you sell or buy options, you have obligations that you have to meet. If you get called out, you have to buy the stock at high prices when the stock has run up quite a bit and you now, suffering from huge losses. When you buy or sell an option, that is a contract that you are required to fulfill your obligations. If you do not have enough monies, the broker issues a margin call because they do not want to eat your losses.

 

[Buy1Sell2]

And when the market reopens at 6PM ET? AMP says it goes right back to day trading margins, since the day starts at 6PM. It is a horrible conflation of terms. I hate it all. Oh, and don't get me started on "initial margin." OY!

Options are not traded overnight.

 

[HobbyTrading]

@weij It looks like that I have to repeat myself. Please check the link in my previous message. On that same page you'll also find explanations on the margin requirements for your option positions.

Be aware that, generally speaking, the margin requirement on stocks doubles overnight, after EOD.

See here what IB has to say about it: https://www.interactivebrokers.com/...hm=us&ex=us&rgt=1&rsk=0&pm=1&rst=101004110808

For some of the option positions is the margin dependent on the margin requirement for the underlying stock. So if the stock margin requirement goes up (e.g. overnight), then the related option margin requirement also goes up. See here: https://www.interactivebrokers.com/...hm=us&ex=us&rgt=1&rsk=0&pm=1&rst=101004110808

 

[weij]

OTM options are also, called lottery plays because it is like playing the lottery, hoping somehow to win. You are getting margin calls because you do not have enough monies to cover all your obligations. When you sell or buy options, you have obligations that you have to meet. If you get called out, you have to buy the stock at high prices when the stock has run up quite a bit and you now, suffering from huge losses. When you buy or sell an option, that is a contract that you are required to fulfill your obligations. If you do not have enough monies, the broker issues a margin call because they do not want to eat your losses.

i said my over all theta is positive. do you understand what it means? no offense, just want to make sure we are in same page.