How to calculate margin?

Discussion in 'Options' started by shazam75, Jun 15, 2009.

  1. shazam75

    shazam75

    Hi All

    I am having some trouble working out the IB margin formula which is:

    100% * option market value + (20% * underlying market value - out of the money amount or 10% * strike price, whichever is greater) or $2.50 * multiplier * number of contracts, whichever is greater.


    Now, If I have 1 short Put open position on XYZ which is at a stock price of $80, and my short position has a strike of $70, can someone calculate the margin requirment?

    Thanks!
     
  2. Create your trade in TWS spreadsheet, then use the right mouse button to see it's margin.
     
  3. 1) Take option premium

    2) add 0.20 * (8000 -1000)

    or add 0.10 * 7000

    or add $250


    whichever of the three is greater. In this case, it's option premium + 1400

    Mark
     
  4. johnnyc

    johnnyc

    CBOE site has a margin calculator that you may find useful. Fill in your info(prices, strategy, etc) and it will tell you what the requirement is
     
  5. shazam75

    shazam75

    Ok thanks all for your help - I think Mark's post helped me the most.

    Cheers!