I am looking for a broker that has low prices and good margin rates. Interactive brokers Canada charges horrendous margin requirements. Selling a covered call requires a huge amount of margin much more than twice the margin required for owing the stock outright.
If the call is covered its sale shouldn't require any margin at all. Are you sure you understand your broker's margin requirements?
I had the same thought. To the OP, can you cut and paste IB's margin requirement for covered calls done in a Canadian account?
Yep with interactive brokers a covered call position requires 2-3 times the margin requirement for just being long the stock. I can never seam to make any money with IB because of the absolutely horrendous margin requirements for options.
INteractive brokers requires double the amount of what it would require to buy the stock plus all of the in the money option amount. There schedule is located here: http://www.interactivebrokers.ca/en/p.php?f=marginCA&p=ssf-default Anyways, there are a lot of options traders looking to leave Interactive brokers up here.
read this page. No additional margin is required for Out of the money options covered by stock. http://individuals.interactivebrokers.com/en/p.php?f=margin&ib_entity=llc are you selling an In the Money call ?
You mentioned margin rate then margin req, it is kinds of confusing because they are not related and I am not sure which one of them pissed you off more.
And where on that page does it indicate that "Selling a covered call requires a huge amount of margin much more than twice the margin required for owing the stock outright."?
Judging from the fact that "Anion" just registered this month, and all of his 3 posts are part of this thread, and that he simply regurgitated his 1st statement when others asked questions (without answering their questions at all) - I'd say he's just trying to steer people away from IB for some reason. Shill? Pissed about something else?