Broker that Doesn't Prevent You from Buying Options (before expiration)?

I do this all the time at Td Ameritrade you have to have the money to exercise though or call after hours to do a cashless exercise which basically means you short of buy the stock depending on the put or call. By the way I pay $1/option

 

That's the point. The broker is in the hole and why I happy with my brokers enforcing that practice as it makes it safer for all clients.

 

How does that make your account safer? Your account is not effected by their losses.

 

Cash-Less Exercises enable you to profit/lose by getting the difference between the strike of the option and the current price without actually having the capital to buy/sell the underline. Every broker should do this I was surprised that they didn't.

 

Doubt you can always profitably close the option right before close. The spread may be pretty bad.

But if you're planning on exercising after close, as long as it's a profit position, I guess that shouldn't matter to them especially if they can do no exercise to the OCC.

Sure, if you can buy options for $0.01, in theory someone can control billions of dollars of transactions (to clear) for very little money particularly with high priced stocks. So it's even possible some smallish account loads up on so much that even IB as a whole doesn't have enough cash to go through with the options clearing. But then, since there is the option of no-exercise, which means the account that bought the options just loses money on their gains, I don't see why they'd prevent it from happening if they explicitly explain there is a limit to what they will allow while the rest of the gains are forfeited. But that might open another can of worms where traders might argue they deserve compensation for lost gain or something, since the broker couldn't fulfill helping them settle billions of dollars notional of stock settlement from their lottery ticket trade on their tiny little account. Maybe from an abundance of caution they prevent it and make sure you as an account holder individually has the cash to clear the trade so you can't pin lost-profit on them.

IB seems to be moving more and more conservative though. I wouldn't be shocked if in some time in the future you cant' even open accounts without $100K and is an experienced trader, etc.