kind of odd. I am buying crude put, want to gradually build up, but at some point, when I buy, IB rejected my order, message says "I just have this, in order to get the order executed, I need that much".the in the money needs more margin than the OTMs. I am not interested in the real CL. I just want to leverage the move.
otherwise I just shorted itwhen . and buy some put in oct/nov. this situation is temporary. I try to leverage,buy more than I can afford, end up missing the move.
Do you understand how much money those puts are? If the put is 1.8 that means it's $1800 for that one put.
buying option or selling/naked option. Buying option need not margin. but, there is an exception, if u are a small trader, margin has meaning whether u are buying option or selling/naked option
I just buy call/put. to my understanding, there should not have margin requirements. when I trade CL, intra-day margin needs 2k. plus I need stop loss to manage "naugty noise'move. I hate stop loss to manage risk. often you are stopped out and themarket runs in your favor. crude hits ceiling temperarily. but mayshoot a little bit higher. in this case, myoption may drop out of money lot, but finally the market will correct, and I will net good profit.
IB sucks in this way. they discrinmate small retail traders. so I siwtch to buy USO puts. USO puts has no margin requirements. but I hate USO too. it is treated as stock. I need carefullybookkeep trading for IRS tax purpose. whilefuture option belongs tofuture, I just need keep monthly even yearly net P/L.
You really need to pick up a few option books and learn about options before you start trading them. When you buy an option you pay 100% of the option premium. That premium already has leverage embedded inside of it. So if you buy a put for 1.8, you have to pay $1800 in cash for that put. Which means you need that much money in your trading account. And yes, your margin for options can be MORE then the margin for holding a futures contract.
yes, I paid the premium, but I dont exercise ITM. why the margin requirements. I traded options almost 2years. if my account has 50k, I can buy 50k puts/calls withno question. what I know is Friday expiration after 2:30PM, IB starts to require margin on trading stock options. very bad, since the friday closing often has lotsof good option trades. so I just trade nextweek's option after 2:30pm.