Marco Posted April 17, 2017 Posted April 17, 2017 right, so just spend 1 1/2 hours chatting to IB as to why they charge me ca. 200% of the max loss as margin on my NFLX earnings calendar. I'm on portfolio margin (PM) and thought even on Reg-T surely the max margin should be what the max loss of the position is and would expect PM to do better than that. Well it took them a while to find the answer but they argued that why at the moment my position is covered (long monthly option covers the short weekly) AFTER the expiry of the short leg the long leg (monthlies) could lose more than the net premium of the current spread. so as the short approaches expiry they start to apply a certain probability that the short leg will be assigned and I'm left with just the long long and they calculate the margin on that leg on its own then. The model seems to ignore the fact that I have a put spread and that the puts are out of the money and have a massive time value so the short is very unlikely to be exercised (and if it would be assigned I would make ca. 3 times the current net premium of the spread as a instant profit so I'd be *very happy* with that assignment). After 1 1/2 hours I didn't have the strength to ask whether Reg-T margin would face the same issues. But wanted to point that out to everyone at IB... ah also the risk Navigator will you you a max loss that is equivalent to that margin (so ca. 200% of the real max loss) so that for me makes even less sense. Quote
Petr Posted April 17, 2017 Posted April 17, 2017 @Marco it is insane but when you know it you can deal with it. Thank you for sharing. good trading Quote
Marco Posted April 17, 2017 Author Posted April 17, 2017 (edited) 11 minutes ago, Petr said: @Marco it is insane but when you know it you can deal with it. Thank you for sharing. good trading well IB used to be very good (aggressive) in their PM calculations but they introduced more and more rules recently taking more and more adverse scenarios into account and as a result the margin requirements have increased a lot. I was never anywhere near a margin call from them and now I often have to follow the limits closely and choose which positions I can take. You can change the margin type in the RiskNavigator and if the risk navigator calculates that correctly I pay 113% of what Reg-T margin would be on PM across my portfolio! maybe time to downgrade! Edited April 17, 2017 by Marco Quote
Kim Posted April 17, 2017 Posted April 17, 2017 Strange - when I check margin before entering calendars, they show 0 change in margin. Maybe rules are different in each country? Quote
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