does anyone know if there is a broker that uses SPAN margin when writing. everyone i have inquired with charges 3X Futures. i also need them to have a API that works with Excel and that realize a neutral trade and charge margin correctly. any ideas??
We use span margining, as do most US brokers I believe. So do they use 3x the futures margin regardless of it's distance to the market?
Span margin should usually only ask for the initial margin assigned to the futures contract. Like if your trading an outright futures contract. But, I imagine it also depends on what you're trading. Less if its a short spread with the margin req being the handle count between the long & short strikes. 3x initial maint margin sounds steep. But, they can ask anything they like. They are the "house". & if they are a "fraidy cat" broker not used to dealing with short premium/gamma trades, they could ask for your 1st born. I've heard that IB asks like $5000 per lot on a short option trade for Russell E-mini's.
It should be pointed out that on outright transactions, brokers will use the margin rates as set by the exchanges. Of course, they can require additional margin but never less. SPAN is set by the exchange for spreads, etc... not for outright trades. Again, brokers are free to set their own margin rates for spreads on futures/options instead of using SPAN but most will use SPAN. The exchanges sets margin requirement on what they consider the risk factor of holding an open position. The higher the risk the higher the margin whether it is on spreads, or initial/maintenance on outright holding/writing positions.
what i have incountered is that when you sell the position they charge 3x futures up front, which is ok (but id rather not if it can happen that way).. after it settles the next day it goes to span. the problem is finding the API that works with excel and that does futures and futures options with span. we have checked all of big firms.