Why do we have to post margin (SPAN) on defined risk trades (i.e. butterflies) on /ES Futures Options?
a) If you didn't make the trade yet then the margin shown may be just the cost of the trade, with the margin/loan depending on whether you'll be trading on margin and borrowing once you make the trade. Basically depending on your account balance and qty purchased at that time of the purchase. b) Even after you purchase those options with cash, later you may buy other stuff on margin and no one can assume what was purchased with cash vs what to treat as a loan, so all your positions are considered to be held on margin. Basically they cannot sometimes say "cost" and other times "margin", especially without predicting your current or future cash situation. c) The value of your positions will change all the time, so one day your risk may be $1 and the next day $1.10. So your defined risk is not so "defined" because it will change, just as if you sold and re-bought the same butterfly, each day at a different price. So "margin" may be just a name for that "defined risk" at the moment. d) Specific example may help, especially if you feel that the margin/cost is being calculated incorrectly. Or if I misunderstood your question.