Thx Hello Dollars, really appreciate your help, i was just playing with different scenarios to see what better suits my risk/reward goal. Will look for the exact formula for calculating margins reqs at IB. Old Trader: thx for your comment as well, I do fully understand the risk of this particular trade, just doing it first time with IB. I used to sell covered calls on stocks but they have different margin reqs, but you're right if I don't know the rules I shouldn't play the game. I guess I'll sell May 1025 put/1200 call strangle to get a feel of it. May be just 10 contracts each way. Also I may want to hedge with 1000 put just in case there's no risk of ruin in case on unforeseen circumstances like Sept.11
Why not sell an iron condor instead? The margin requirements will be substantially less and your risk will be limited. But either way, premiums are anemic these days, making the risk:reward of either position much less attractive than during the halycon Vix 30+ days of yore.