IB margin calculation really rediculous!

Discussion in 'Retail Brokers' started by hey825, Jul 14, 2006.

  1. hey825

    hey825

    for ndx 1425/1475/1500 butterfly charges about $5000/spread on margin. IB is pretty stubbon and has no plan to change this. For the same position, TOS only charges $2500, half of IB amount.
     
  2. And relax....nice to get things off your chest huh?

    You have an unbalanced butterfly there. Are you doing a debit fly or credit iron fly?

    Comparing ToS to IB is not apples to apples. The each have strengths and weaknesses. I am a happy client of both

    FWIW: Might want to use slightly less provocative thread titles in future - just some friendly advice if you want to avoid the inevitable flames that are about to ensue...

    Good luck! and let me know about the fly variety.

    MoMoney.
     
  3. They charge quite high even for intraday margin requirements. Only 50% of full margin requirements. Too bad! :(

    I would like to get about 20-33% only due to my strategy.
    The reason I request this is I have very tight stop-losses (I won't even allow my capital to fall just 1% of required margin).
    Now a total waste of most amount of margin requirement!

    By the way, how about TradeStation?
    Stable? Good customer services?
    What's your opinion?
     
  4. hey825

    hey825

    It is credit fly, just like qqqq 38/39/41 calls at +1/-2/+1 as an example. TOS would only charge margin on the 40/41 short vertical, but IB treats this as 39/41 vertical on margin. I think IB and FBI should be ranked at the same level as "diffifulty in talking with". yes, you are right, it did help get things off my chest :D

    IB has its own strenght such as execution and commission. But wasting margin in this way is not acceptable in general. Want to know why you think IB and TOS is not apple to apple.




     
  5. Spammer, did you say TOS or POS? Piss off!
     
  6. You could always do the synthetically equivalent debit fly. Margin differences between IB and ToS will not be any different in that case e.g.

    1425/1475/1500 all PUTs or all CALLs

    This is the same risk profile as your iron fly. The credit you receive on the iron fly is a result of the short box element. There is no benefit to it over the debit fly other than potential slippage on DITM legs for the natural fly.

    The debit for the fly will be the same $ amount as the reduction in your option buying power at ToS for the iron fly. Just a suggestion.

    LOL. Well it depends who you speak to. I favor the live chat facility as it allows you to prepare and write things down clearly and in detail which I feel is an advantage over voice chat in certain situations.

    Well, you've mentioned a couple. The main difference is that ToS is highly specialized in the area of US equity options trading. This is reflected in the options-oriented software and options-oriented customer support.

    IB offers access to a plethora of markets and products worldwide. It's an entirely different animal. More a jack of all trades but also master of deep discount. IB even has skew modelling capabilities that ToS does not (at least on their retail platform).

    Lastly, if you are genuinely concerned about margin, then you might want to consider options on futures e.g. NQ for your equivalent to NDX. These receive SPAN margin treatment which is risk-based versus Reg-T used for equity options. SPAN treatment for flies will be superior to the equivalent Reg-T requirement.

    IB offers options on futures through Globex. ToS does not - their clearing firm, Penson, is yet to support this.

    Once again, I am a very happy client of both brokers. I see no reason to be overly zealous advocating/defending one broker or another as seems to be the case for a few ET members.

    MoMoney.
     
  7. hey825

    hey825

    MoMoney, thanks for typing these information. I know the sythetic relationship of the calls vs the puts position, but I don't know how IB is going to margin the calls (I mean affecting buying power) in this case, since IB does not calculate margin using the same risk profile as TOS does (as I met in this case).

    Good idea on NQ option, although the 20 multiplier might cost 5 times commission than NDX. With the benefit of SPAN margin treatment, I think it is still a good idea.

    I have declare myself heree: I am not against IB here since I also like IB in most cases. IB in general is good even better. But I do hate IB on margin treatment. I have experienced the margin problem few times. For example, once I had a large call positon from OTM to ITM, I want to short stocks to hedge and then excercise the calls. IB refused to do this and big profit become small one. NO matter how good IB is on other issues, it is stll very bad on margin issue. Have a nice one.



     
  8. Alpine

    Alpine

    I trade future options but IB charge very high margin req on F.O. Does TOS only impose span margin set by exchange for F.O? Any other good firms out there that are friendly to future options writers?
     
  9. It is going to cost you money to make money! If you do not like it, then switch firms.
     
  10. Alpine

    Alpine

    Which firm offers better margin for naked call or put on future options? IB, TOS, Option Express? Can anyone share your experience?
     
    #10     Mar 5, 2010