You should give up trading unless you have shown to be able to eliminate your over-trading problem. Don't issue the ticket to IB. Issue the ticket to yourself as you are overtrading.
Are you trading PM?? Are you buying shorter dated wings for protection that expire,leaving the position vulnerable to a big adverse move?? Sounds like you are short spreads and delta hedged.. Do you get blown out at the short strike on expiry if you dont delta hedge?? Something is off.... can you post a hypothetical position??
You have a gambling problem. Buying OTM options is like going to Las Vegas and betting it all on one pull at a slot machine. 99% of the time, you will lose all your monies, 1% you can get lucky and actually, make monies but, not enough to cover all those losses. And if you are going to gamble, go to Las Vegas. Atleast, you will get free food, maybe a room for your troubles. Nothing if you lose it gambling on Wall Street.
you are putting in a lot of work when the guy could easily post his account positions and show a real example. it would have taken 5 minutes to help him, but his inconsiderateness has cost you hours.
Are you trying to say the time decay of a long option? Yes, the OTM options would usually expired with no value. As I mentioned in an other post in this thread, the over all theta is positive. So they are some cost I'd like to take for the protection, and also hopefully to lower the margin. The latter is not taken well by IB though.
The actual portfolio is pretty messy, with more than 100 options of different strikes and expires. And they varies from time to time. For instance, if the short term option is relatively expensive, it would be like short ATM of the near term and long OTM of the far term, which makes the PnL curve in a roughly W shape. But I guess my question should not be related to the specific portfolio. I assume no matter what it is, as long as the market doesn't shake up, the margin should not change much over night. No? If such assumption doesn't hold, such risk system doesn't make sense at all. Other than the market risk, we have to expose another unpredictable (margin) model risk.
someone also mentioned "Overnight margins". What do you actually mean? There is "projected look ahead margin" and they are with exactly same value as the current margin. And when the latter jumps overnight, the former does so, too.
When it comes to IB, that is not true. They are a F-you-at-drive-thru place. This is based on reports I have seen from other posters here that use IB.