IB Margin on Iron Condors

Discussion in 'Retail Brokers' started by Alechka, Jan 19, 2007.

  1. Alechka


    Does anyone trade Iron Condors in IB? Do they margin one side or both?

    I know this question has already been discussed on ET but maybe something has changed since then.

    I sent this question to them and this is what they replied:

    "Although the option margin optimization software is designed to recognize Iron Condors and assess the account the margin requirement for either the put spread or the call spread, there is no guarantee that an Iron Condor position will be recognized in all circumstances. In those circumstances where the Iron Condor is not recognized the account will be assessed higher margin requirements, such as the sum of the margin requirements for the put spread and the call spread."

    This is kind of a vague reply. What are the circumstances when IC is not recognized as such? Does anyone have any hands on experience? Is there anyone from IB (Def?) who can provide a more clear answer?
  2. Zegras


    I have found that Thinkorswim is the best broker for the Iron Condor. They seem to understand the concept behind the trade and that you can't lose on both sides. Optionsxoress seeems capable in this departemnt as well, but I still like TOS for condors. Their sotfware allows you to acutally analyze and place condor trades if you wish.
  3. jj90


    IB margins both sides. Yeah it sucks.
  4. Steve_IB

    Steve_IB Interactive Brokers

    This is incorrect. IB margins only one side.
  5. jj90


    Steve can you confirm if Canadian customers get margined on both sides? Cause I'm sure getting that.
  6. Steve_IB

    Steve_IB Interactive Brokers

    Sorry, everyone apart from Canadian customers get margined on on one side. This is to do with Canadian regulations - I do not know the full details, but as we would have had to do special programming to exclude Canadians, we definitely would have tried
  7. hopback


    I dealt with this a while back.

    I ended up talking to the CBOE regulators.
    They told me that the strikes MUST be equidistant.

    They told me that they couldn't get the SEC and NYSE to agree to wider spreads.

    example: a 40/50 70/80 will not be recognized as an iron condor and will be margined on both sides.
  8. Alechka



    Will IB recognize the trade as an Iron Condor if I leg into it or open the two sides at different times?
  9. hopback


    You'd have to talk to them.
    I would imagine that, once you put on the second spread, their system would pair up the entire position and recognize it as a condor.
  10. Steve_IB

    Steve_IB Interactive Brokers

    Yes (assuming that's the only positions you have related to that particular underlying security)
    #10     Feb 7, 2007