Is it possible that the option contracts held exceed the value of the account? Or does the broker limit the approach to buy more than the value of the account? I refer to IB`s margin accounts.
No. Options are not marginable. A $50,000 account can't buy more than $50,000 in options. Does not matter what the broker is.
I think we're all confused as to what exactly you're asking @antares66 Another thing you could be asking is will your broker let you hold options where the value if you exercised them would exceed your account balance. The answer for IB is that they'll let you do that up to about 2 days before exercise, this you're subject to autoliquidation. Every broker has some way to ensure you have the cash to buy the stock if you hold to expiration, but usually don't care until just before expiration.
Is this standard in IB ? I thought that if the post-expiry margin predicted (in account window) was in excess of the allowed, they would autoliquidate option positions before the maturity.
I think officially they liquidate up to the day before, I've had them do it 2 days before so like many things at IB your results may vary depending on what "the algorithm" decides to do.
If this is an important issue for you don't you think it would be best to call or message your broker for an up to date process? Whatever current IB clients believe to be true, IB has shown a pattern of changing their process without warning.
In early 2018, I was told by IB support that they start liquidating at 13:30 ET the day of expiration. This was for post-expiry excess related to equity options. For futures they have different timelines documented here: https://www.interactivebrokers.com/en/index.php?f=1567&p=physical
What i have understood is, that the overnight margin is 50% of the corresponding shares the option refers to. I don`t know if ib liquidates the held options in the case of the corresponding shares exceed the account balance. But i guess so.