What is this strategy called?

Well I am not with IB but they reference a page where their users can figure it out. I cant tell how you arrived at the 3.5% but I am guessing you are not taking the correct values into account. You should check what the margin requirement is for simply being 100 options short in a spread 40/40 and see whether that isnt also 2200 EUR.

 

Oh and its definitely NOT an exchange recognised strategy so the lower margin (if any) is purely a result of your broker being good for you.

 

I know this is not exchange margin or strategy but IB. How I arrived at 3.5 %? Well simple. It is the only position I have open at the moment and 2.200 EUR is the margin displayed. I checked it also before opening a position. I found it strange, because usually for other similar strategies it was 10 times higher.. But I do remember IB sent an email a few weeks ago that they will run new algorithm.. I was notified about it because I was paying overexposure fee and the wrote that when new algo comes I will not pay anything.. So maybe this is it..

 

You make my point. The margin is just what you would have on a spread, you should calculate on the basis of just the spread - it would be the same.

 

Selling premium and hoping the market doesn't move isn't a "strategy."

 

Really? I am doing very well with it, thanks.. But then again, do you even trade?.... Oh and btw, I cannot find where I mentioned that I trade strategy, where market is supposed to stand still. Can you maybe point me to the right direction smartass? I could care less is market moves either up or down. It moves up, I gain on lower wing, it goes down, I gain on upper wing, until it expires and I gain on both.. Whats not to like about my strategy...

 

Your wide Iron Condor performs simplee maaaavelously if it does what you want it to do. If it moves outside the short strikes of the body, not so much.

 

Well is that any different from other strategies? I am betting here that crude will stay within 40 and 80 in next 1-2 months. I am 3 months out and plan to close it in 30-60 days. So yeah sure, crude can tumble to 20 tomorrow and I am screwed. But so are people long CL futures, so are people long XOP ETF, so are people long XOM stock to name a few out of thousands.. But for me it seems far easier to guess where crude is with 99 % probability NOT going to be in next 1-2 months than to where it IS going to be tomorrow, after 2 weeks or after 1 month..

Besides I DO NOT plan to hold it until CL breaches my strikes.. Why would I do that. Nor to I plan to allow it to come near enough to put me in danger with sudden very big daily move. That is why "rescue" strategies are for and with 3.5 % margin use, I can do plenty.. Go wider with more options, buy more time, etc etc..