l am in some short positions which are at a profit of ~20% but cant get out (as requires me to buy back at large debits) this increasing my margin deficit. my excess liquidity in this IB account often goes into the negative, reaching about 5% of my soft edge margin, 10% limit, before liquidation (had several in last months). does it make sense to transfer sufficient funds from my other IB account, so the other endangered IB account can close the positions it is profitable in? but if l transfer the money back to the 'plentiful' funding IB account will the endangered IB account be in a better position? please comment. cheers
If your post makes any straight-forward sense to the options experts on this forum, it is clear to me I have no working knowledge of options and I should, without further thought or discussion, remain forever banished to my trading domain of futures and occasional equities. Good luck!
This only makes sense if he is in ES or NQ calendars which are not supported natively by CME. IOW, you must leg calendars and diagonals. Equity options (index and single name) would not be an issue. Say you leg into a bear calendar and it goes DITM. You would be forced to cover the short at a price that would exceed your excess.
Thanks @destriero. With legging it makes sense. OP says he's short in his first sentence. Doesn't say calendar though. Assuming it is as you suggest, what I know of short calendar is it is aggressive and requires the price movement in the nearby to quickly offset the time decay. Hence the OPs situation... profit on the nearby, but movement on leg 2 has not decayed and moves with the market creating the large debit, when exiting as leg. Thanks. And my apologies to the OP for being a little prickly.
It's moot unless it's CME FO calendars. Say you're short a massive SPX calendar that is as terminal profit. It doesn't matter if both legs are at 300 (0.00 spread value)... you simply cover at 0.05 or wherever the NBBO is and fill. You would only have a problem if trying to cover the short leg without excess eq. *As a spread* there is no issue.
@destriero So if you leg into a diagonal or any spread it doesn't count it as a spread for margin purposes?