I would like the profit potential of leverage without being wiped out with 1 fluke day in the market....ahhh to dream
So what exposure are we talking about? Give us a rundown of your risk at -5, -10, -20%... in dollar terms...
I can tell you IB will value the put based on it's bid/ask even if intrinsic is far higher, so in their case you're right, the put might not keep them from autoliquidating you if the bid/asks go haywire.
Yeah that's what I thought... but with a portfolio margin account it should be fine anyway I think. And maybe IB has some discretionary system in place to check for hedges. What happens in overnight large drops? What if you're fully hedged in FDAX with DAX put options... and the future drops overnight.... The options are not updated since those are closed for trading. Surely they've got some system in place to value the hedge....
I should have specified that was for a regular margin account. I presume you'd be OK with PM, but their calculations with that were so opaque I stopped using it after a day, so I can't be sure.