Butterflies and Condors vs IB

Discussion in 'Options' started by johnk49, Feb 16, 2004.

  1. johnk49


    Just a quick question.I'm thinking of changing my broker to IB and I was wondering if you have to put up margin on both sides of these spreads,or is it treated as one?Can't seem to find info on their site.
  2. ktm


    For equity and index options, I believe you will need margin for both sides. If you are using futures options (ES), those are subject to SPAN and only one side is required.
  3. Flys have been margined properly at IB for some time, but iron condors required margin on boths sides until recently. However, I was told a few weeks back that they were in the process of fixing their margin rules for condors, and may have done so by now. Contact Def to get clarification.
  4. I was told by IB that condor margining was now available - but not certain if they meant all contracts or ??? I haven't had condors on in a while so haven't been able to test ....

    Yes, ask Def ...
  5. deleted post
  6. Steve_IB

    Steve_IB Interactive Brokers

    We just changed our margin handling rules for condors, you will only need to post margin for one side.
  7. just21


    Is this for just the CBOE or all markets (including eurex)?
  8. Steve_IB

    Steve_IB Interactive Brokers

    I'm talking about US stock and index options.

    For most of the futures exchanges we use SPAN, I believe for Eurex we use their own portfolio margining system which is similar to SPAN.
  9. mance


    Hi steve!

    Thx for your answer...
    Could you tell us whether the SPAN Margining system requires less margin than the CBOEs ruled-based system.
    Let's say I want to sell a June Condor on the SPX with the following strikes:

    LONG PUT 1050 SHORT PUT 1065
    LONG CALL 1240 SHORT CALL 1225

    My margin should be equal to the max.risk which is 15Points x 100$=1500$ (+option Premium),right?

    In case I did the same with the CMEs Mini S&P 500 (ES) shouldn' t the margin be lower,because of other parameters (Scanning Range,volatility) the SPAN algorithm uses?

  10. ids


    Generally speaking, SPAN margin should be less but it is really hard to compare. For ES June options portfolio that is very close to yours:
    LONG PUT 1050 SHORT PUT 1070
    LONG CALL 1240 SHORT CALL 1220
    Initial margin is $743, maintenance is $594. Now, if we take care about different multipliers (50 for ES vs. 100 for SPX)…
    #10     May 17, 2005