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Portfolio margin

  #16 (permalink)

London, UK
Trading Experience: Advanced
Platform: TT, CQG, esignal, TWS
Favorite Futures: Futures, spot FX, Energy Spreads Prop Firm
Posts: 61 since Jun 2011
Thanks: 16 given, 56 received

shodson View Post
Selling spreads have limited, defined risk. Selling naked does not, unless it's selling a naked put, which has the risk capped at the instrument going to $0.

I think we have to get the terminology correct here. You mentioned 'selling a spread'. I understand spread to mean entering into 2 or more simultaneous positions in different instruments. As you said 'selling' a spread I take that to mean making a spread (market making). The majority of these spread strategies are not limited risk (LR). A few of them are such as long straddle/strangle, long/short butterfly/condor and long wrangle however the majority of them are not LR.

shodson View Post
He was referring to naked options, not spreads.

Yes in his original post he referred to options not spreads. I answered his original question on portfolio margin and why it changes in real time. My post was specifically about your statement that 'selling spreads has limited defined risk' which i believe to be incorrect.

Are you possibly referring to entering into a credit spread? please explain. IF so this would be 'entering into a credit spread' and not 'selling a spread'.

good luck.

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