Collateral for Debit Call and Put Spreads

Discussion in 'Retail Brokers' started by Quanto, Jan 30, 2024.

  1. Quanto

    Quanto

    Which brokers offer the following options trades and what are their margin or cash requirements?

    1) Bull (Debit) Call Spread: ShortCall + LongCall
    with LongCall.Strike < ShortCall.Strike

    2) Bear (Debit) Put Spread: ShortPut + LongPut
    with LongPut.Strike > ShortPut.Strike

    The broker TradeStation says the Margin or Cash Requirement is just the NetPremium.
    It says it's tradable in both MarginAcct as well in CashAcct.

    How is the situation at other brokers?
     
    Last edited: Jan 30, 2024
  2. Robert Morse

    Robert Morse Sponsor

    These require Option Level 3, spreading. Lightspeed requires a Margin account for anything over L2. If you only want a CASH account, you need to find a broker that allows L3 in a CASH account. The requirement is almost always the net debit.
     
  3. Quanto

    Quanto

    Do you have a link that confirms that the requirement is really just net premium (net debit)?
     
  4. Robert Morse

    Robert Morse Sponsor

  5. Quanto

    Quanto

    That's the CBOE exchange rates, brokers can have different (higher) collateral rates.
    I wanted to compile a list of retail brokers that offer the said options trades.

    Btw, is the above margin document really from the year 2000 ? :) Ie. 24 years old?
    It really is! :)
    Here*s a newer version dated Nov 30, 2021:
    https://cdn.cboe.com/resources/membership/Margin_Manual.pdf
     
    Last edited: Jan 30, 2024
  6. Quanto

    Quanto

    FYI:
    The situation for the above spread trades at the broker TradeStation for Cash Accts has been clarified by a TS representative. I've summarized his answer in --> this posting in the other thread.