VIX put calendar x 10 contracts

[ivylanthier]

I entered the VIX 16 Put calendar,  May/July x 10 in Optionhouse for a total margin requirement of $9000.  I simulated the same trade in TOS and got similar option requirement results.  This would be closer to 100% of a 10K account.   Am I missing something?

[Kim]

We discussed it on the VIX discussion topic. As I mentioned over and over again, this is one of (many) reasons why I believe IB is superior to any other brokers.

[Yowster]

I entered the VIX 16 Put calendar,  May/July x 10 in Optionhouse for a total margin requirement of $9000.  I simulated the same trade in TOS and got similar option requirement results.  This would be closer to 100% of a 10K account.   Am I missing something?

This is a big difference between IB and other brokers - IB has $150 margin per spread, but some other brokers treat this as a naked option and hence the large margin requirement.  To reduce your margin to $400 per spread, you can buy the May 12 strike put against it for 0.05.  It should not have a huge impact on the performance of the calendar since its so cheap to buy.

[Kim]

This is a big difference between IB and other brokers - IB has $150 margin per spread, but some other brokers treat this as a naked option and hence the large margin requirement.  To reduce your margin to $400 per spread, you can buy the May 12 strike put against it for 0.05.  It should not have a huge impact on the performance of the calendar since its so cheap to buy.

Great minds think alike - I just starting to type exactly the same recommendation. I would probably go even with 13 put around 0.18 to reduce the margin requirement to $300. 

[ivylanthier]

Thanks for the help.  Much appreciated.  But i will try to get out at break even to reduce total risk to my account and free up margin for other trading.  And look into an IB account.

[craigsmith]

This is a big difference between IB and other brokers - IB has $150 margin per spread, but some other brokers treat this as a naked option and hence the large margin requirement.  To reduce your margin to $400 per spread, you can buy the May 12 strike put against it for 0.05.  It should not have a huge impact on the performance of the calendar since its so cheap to buy.

Thanks for the information.