Interactive Brokers Incorrect Option Margin Requirements

Discussion in 'Options' started by frostengine, Sep 20, 2017.

  1. Robert Morse

    Robert Morse Sponsor

    They don't. It is easier to code in one risk rule then many. They did the same with my BABA example.
    #21     Sep 24, 2017
  2. Sig


    I agree. Pretty poor display of sheer laziness imho as someone who has coded similar stuff, but that's their model.
    #22     Sep 24, 2017
  3. ajacobson


    Grooming for a sale ?
    #23     Sep 24, 2017
  4. JackRab


    @Robert Morse, what if clients are long but leveraged? So... long 400 stocks @100 with 30k capital... they would be subject to IB's margin rules. Same would go with a long call or put spread...

    Maybe OP has more positions which are leveraged/over own capital... so a long call spread is bought on margin and needs to adhere to those rules.

    During GFC I was long :vomit: stocks incl AMBAC... and short some options... (again :vomit:) then margin on the options wasn't covered anymore due to the floor collapsing and IB was liquidating some AMBAC (which ended up being a good thing since it dropped way beyond what the liquidation level was).

    Not saying that IB's margin rules make total sense... they don't...
    #24     Sep 24, 2017
  5. Robert Morse

    Robert Morse Sponsor

    I'm not a expert of what IB does. And, they seem to change their risk rules often.
    #25     Sep 24, 2017
  6. truetype


    I'm sure IB is tired of being gamed by undercapitalized "traders" with huge tail-risk exposure.
    #26     Sep 24, 2017
    Ryan81 and JackRab like this.
  7. Sig


    How are they being "gamed" exactly? How can you or they lose more than the purchase price of a long stop or option or the max defined loss on a european options spread? That's the topic of this thread, not if IB can or should increase allowed leverage.
    #27     Sep 25, 2017
    raf_bcn likes this.
  8. Do you even understand what tail-risk means ?
    #28     Sep 25, 2017
  9. Jack, in one account I own 50K in options, have about 50K cash. My initial margin is over 50K, so I can;t open a new position. So, again my portfolio: 50% in being long options, 50% cash, where is risk? where is logic ? Lets stop talking about hypotheticals here. Show me the risk ?
    #29     Sep 25, 2017
  10. ajacobson


    Actually it's all a hypothetical with out seeing a money line. Black out the ownership details and post your money line.
    #30     Sep 25, 2017