I was hoping cdcaveman would reply. There aren't many alternatives for pure options traders out there, at least not based on commissions. Based on mentions here on ET: Thinkorswim (TDA) and Optionshouse come to mind.
You're thinking of futures margin. Futures p/l is handled as a cash flow, not FOPs. FOPs are m to m but as unrealized p/l. FOPs use SPAN or a risk scenario based margin, whatever, with a "one day risk horizon." These differences sometimes cause the margin for FOPs to be greater than the margin for the UL. IB also can and sometimes does mandate margins greater than the exchange rates. OP, auto liquidation is a scary reality at IB. I don't like it, it would be nice if IB could find a better way. But it's part of the price you pay to do business there. The spread has two different ULs so the long option does not cover the short. It's not a calendar spread per se, you're trading the futures spread as well. The contango in 2008/2009 reached ridiculous proportions. Your spread could lose far more than the debit. I found this page enlightening. http://ibkb.interactivebrokers.com/node/990
This is why I do not have an IB account. I always here these horrible stories about auto liquidation of positions. There is enough involved in Risk management when trading your account, the last thing I want to add is some totally random margin call even if you have more than enough margin. I do not like risks I cannot plan for. I will stick to my TD and Etrade accounts, never had any issues with them.
Its because of Elite trade why I chose never to open an IB account. Those stories are nightmares. there is no way to manage risk with an IB account since they add a big counter-party risk that you cannot account for when planning a trade.
Yeah but IB is supposedly an ECN, not a market-maker with their own stock, so it must be some affiliate company they are helping out.
Everyone should be aware of the f.o.p calendar spread issue. But that goddamn autoliquidate is predatory. No other word for it.