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Margin depends on the broker you work with. As you work with IB your margin will probably be higher than the margin for traders working with other brokers. TWS will show you the margin, if you enter this trade.
Best regards, Myrrdin
Can you help answer these questions from other members on NexusFi?
Hi Myrrdin,,
Thanks for the answer, but I am thinking that there should be no margin as one position cancels the other?
Maybe my observation is incorrect?
Also, do you think this type of trade gives adequate protection against an adverse market movement?
Thanks
Mick
Obviously you are looking at the ESU C3000 and the ESZ C3000.
I assume that IB will foresee margin for this trade.
Delta for the September option is 6 %, delta for the December option is 15 %. Thus, there is some protection. If you consider this protection as adequate, depends on your judgement.
I do not sell ES calls in the current situation, and do not intend to sell ES calls in the near futures.
I also saw the recommended from Carley. Though the cotton trade didn't go idea, she hasn't execuated a stop loss yet. So far the only adjustment is to roller up the insurance leg.
James Cordier collects premiums by selling options that is far deep out of money guided by the fundamental info. Every trade has only one leg. That's simple.
Carley Garner's method is a little bit complicated. For a bullish setup, she will buy a future contract and at the same time selling a call option slightly above. And at the same time, she will buy a put option below as insurance leg.
Can some one compare these two different styles to list out the pros and cons? Thank you.
Hi sinpeople. I'm sure others will be able to give a much more detailed response, but basically Carley is doing a collar trade, which is defined risk and reward. The rewards are capped, and so is the risk. Selling nakeds of course is very different. The probabilities for the two trades are very different too. Collars tend to be a 'safe and steady' type of trade in my experience, although a bit un-spectacular.
As my post-count is less than 5, I cannot post a link, but there is a lot of material on google explaining the mechanics of collars.
