can someone explain margin requirements for vertical ratio spread for IB or thinkorsw

Discussion in 'Options' started by fredit, Nov 17, 2008.

  1. fredit

    fredit

    Hello, I am interesting in doing a vertical ratio spread.. I have the requirments right here.. but they I'm not 100% sure on requirements $ wise:

    http://individuals.interactivebrokers.com/en/trading/marginRequirements/margin.php?p=o&ib_entity=llc

    let's say for example.. I am looking to buy 1 nov08 135 put strike of bidu and sell 4 nov08 120 strike puts.. and the stock is currently trading at 178.89.

    What would margin requirements be since this is a credit?
    (nov08 120put = .18cents, nov08 135put = .55)

    thanks for any input!
    Lee
     
  2. Break up the position into one debit spread and three short-puts. Run the numbers and see what you get.
    :cool:
     
  3. if you're under reg-t, it'll be 1200*3 + 150 + option premiums.
    approx $4000
     
  4. fredit

    fredit

    how did you get 1200? 10% of the 120strike*100?
    I was under the assumption it was 20% requirments.. but then again.. idk :)


    thanks!
    Lee
     
  5. If the put options move in the money does IB require you to have the full aggregate exercise price in cash? In this case that would be $36,000 for 3 contracts with a strike price of 120.

    Assuming the possibility of 2 for 1 margin, would $18,000 suffice?
     
  6. drcha

    drcha

    May I share an experience with IB? Despite what their Web site says, I found that they did not calculate margins based on spread positions until I requested portfolio margining. Prior to that, they calculated every short option's margin as if it were unhedged. So make sure to ask them for portfolio margining.

    Mary