How to write call options at IB?

Discussion in 'Order Execution' started by arilou, Aug 17, 2009.

  1. arilou

    arilou

    Hi just21,

    No, it is an old account (more than one year old, if it counts as "old" :) ). And I use only the base currency.
     
    #11     Aug 17, 2009
  2. Do you have the stock? If this is not a covered option then IB will have to get you out the trade if you are called. The changing P/L is what it will cost real-time to get you out.

    If it is covered, you get your premium
     
    #12     Aug 17, 2009
  3. arilou

    arilou

    That is the point and that is what I do not understand.

    I dont want to do it naked. I do have the stock. But I cannot see my premium anywhere! It seems I bought the necessary stock, I sold the call option, and I only have the loss for the spread and commission, and I cannot see the premium.

    So did I oblige myself for nothing?? It seems so from my balance sheet.

    In fact, I placed a Buy Write order, which means that I buy the necessary stocks and sell a call option at the same time. But the premium is nowhere! :(
     
    #13     Aug 17, 2009
  4. RTFM

    Combination Type:
    Covered Calls and Puts

    Short an option with an equity position held to cover full exercise upon assignment of the option contract.

    Margin Accounts: IB Initial
    Initial stock margin requirement + 100% of in the money option value. Short sale option proceeds are applied to cash.
    Same rules as cash for IRA Margin Accounts

    Margin Accounts: IB Maintenance
    Stock maintenance margin requirements + 100% of in the money option value.

    Cash Accounts: Covered Calls
    Stock paid in full.

    Cash Accounts: Covered Puts
    N/A

    http://www.interactivebrokers.com/en/p.php?f=margin&ib_entity=llc
     
    #14     Aug 17, 2009
  5. I do not use IB so I don't know the specific screens but the premium received should show up in your available cash. The P/L is constantly changing to show what gain/loss you would lock in if you liquidated your position at that point.

    I do also want to reiterate what others have said though. You need to learn a LOT more about options before trading them or you are going to blow your account. You need to understand what the Greeks are and how they affect the outcome of your trade. You need to know what Volatility and Implied Volatility are and how they affect options pricing. You need to understand Open Interest, what happens on expiration, when expiration is, and more. Options are probably the most complex thing you can trade and certainly not something you want to be trading if you have no real understanding of how they work.
     
    #15     Aug 24, 2009