Okay, so for kicks I thought I would look at selling one (1) naked put on the spyders. I took a look at SPY and picked the 140 strike with a May 18 expiration. Before I go "all-in" by being short 1 put (yes folks, that is a one), I decided to use the check margin feature that IB provides. Maybe I'm crazy or just totally clueless, but IB just told me that to sell 1 put option on the SPY with less than 30 days to expiration would require: initial margin= $22k, maintenance margin = $22k This can't be right? For 1 contract??? :eek:
IB's formula for computing margin is here: http://www.interactivebrokers.com/en/trading/marginRequirements/stockIndexOptions.php?ib_entity=llc You can reduce your margin requirements for short options in three ways: 1) Buy something against it (turn a short put into a very ITM put vertical) 2) Use portfolio margining 3) Sell futures options instead. An ES naked put will only use a few thousand in margin.
Yeah, $2600 is more in line with what I would have expected. Not sure what is going on. I will try again tomorrow and maybe IB will tell me something different. I have noticed that since I have upgraded my software a few days ago, some things just aren't working right...I might need to roll back to an older software version. Anyway, enough of that. Thanks for clearing that up!
and, the # it shows you there on the order confirmation screen, is your TOTAL margin requirement AFTER the trade. Which means it counts all your other positions too.
Exactly. If you just want to see the margin for a single, standalone trade, you can try getting on the IB demo account. If there are no other trades in place, you can do a "check margin" on your sample trade to get a clean look.
Demo account is not reliable for checking margins, maybe you mean the paper-trade account. What I do to find margin-req for a single sell is first enter a sell-order for 1, check the m-req, change the orderamount to 2, and heck again. The diff is the needed margin for a single sell. Ursa..
the demo account is reliable for checking margin. I have compared it to my live account. They use the same backend so I don't see why it would show a different result than your regular account.