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Portfolio margin
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Portfolio margin

  #11 (permalink)
Elite Member
Sofia, Bulgaria
 
Futures Experience: Advanced
Platform: IB,TOS
Broker/Data: IB
Favorite Futures: Options,ES,6E,ZB,SPX,RUT,CL
 
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myrrdin View Post
I trade short options with RJO and just open an account with DeCarley for the same purpose. But both do not trade options on stocks, as far as I know.

Best regards, Myrrdin

Thank u very much!

I know RJO and will contact them.

No offence to DeCarley but they looks very strange for me ....

For me best for options is TOS/DTA but only reason to not open account there is too high commissions. As far as i know there is promo offer there , something like no ticket and 1.5$ per side per contract but this is still too high for me.

Thank u again!

Ivo

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  #12 (permalink)
Market Wizard
Linz Austria
 
Futures Experience: Advanced
Platform: Zaner360, TWS, Vantage
Broker/Data: DeCarley, IAB, RJO
Favorite Futures: Commodities
 
Posts: 1,099 since Nov 2014
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alchemist74 View Post
Thank u very much!

I know RJO and will contact them.

No offence to DeCarley but they looks very strange for me ....

For me best for options is TOS/DTA but only reason to not open account there is too high commissions. As far as i know there is promo offer there , something like no ticket and 1.5$ per side per contract but this is still too high for me.

Thank u again!

Ivo

In how far DeCarley looks strange to you ?

I am afraid you will not get commissions of less than 1.5 $ per side (I assume 3 $ round trip) at RJO as a option seller (= limited number of trades). But let me know if you are successful.

Best regards, Myrrdin

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  #13 (permalink)
Elite Member
London, UK
 
Futures Experience: Advanced
Platform: TT, CQG, esignal, TWS
Favorite Futures: Futures, spot FX, Energy Spreads Prop Firm
 
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shodson View Post
That's one of the problems with naked short options: your mask risk is infinite. If you sold a spread your risk would be measured and not change over time.

not necessarily true. In terms of downside risks if you sell an option spread it depends on the type of spread. Some spread strategies have limited downside risk and others have unlimited.

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  #14 (permalink)
 Vendor: www.probabletrades.com 
OC, California, USA
 
Futures Experience: Advanced
Platform: IB/TWS, NinjaTrader, thinkorswim
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londonkid View Post
not necessarily true. In terms of downside risks if you sell an option spread it depends on the type of spread. Some spread strategies have limited downside risk and others have unlimited.

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. He was referring to naked options, not spreads.

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  #15 (permalink)
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alchemist74 View Post
Hi all,
Is there anyone who is familiar with Portfolio Margin? My specific question is: what is logic / math that force initial margin to change over time. For example: when opening a position (Short Call) with DTE33 and 10 delta, initial margin is about $ 5500 but with approaching expiration it changes and it can reach $ 9,100 or more. This example is with equal (no change) other parameters, i.e. I only change DTE and I use so-called sticky delta method to find margin change.

Thanks in advance,
Ivo

Hi. Portfolio margining by it's very nature is dynamic. Your brokers back office system will margin you in real time.

Good Luck.

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  #16 (permalink)
Elite Member
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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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  #17 (permalink)
Elite Member
Sofia, Bulgaria
 
Futures Experience: Advanced
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londonkid View Post
Hi. Portfolio margining by it's very nature is dynamic. Your brokers back office system will margin you in real time.

Good Luck.

Hi,

yes i know it is dynamic !!! The question is what is the logic and math behind this dynamic. My broker (IB) told me that exact formula is secret.

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  #18 (permalink)
 Vendor: www.probabletrades.com 
OC, California, USA
 
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londonkid View Post
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'.

Yes, I was referring to credit spreads, as opposed to selling naked. The credit spread, vertical spread, call/put spread, whatever you want to call it, is the safer, limited risk variation of selling naked options. Sorry if I wasn't specific enough.

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  #19 (permalink)
Elite Member
Sofia, Bulgaria
 
Futures Experience: Advanced
Platform: IB,TOS
Broker/Data: IB
Favorite Futures: Options,ES,6E,ZB,SPX,RUT,CL
 
Posts: 47 since Jul 2010
Thanks: 6 given, 42 received


myrrdin View Post
In how far DeCarley looks strange to you ?

I am afraid you will not get commissions of less than 1.5 $ per side (I assume 3 $ round trip) at RJO as a option seller (= limited number of trades). But let me know if you are successful.

Best regards, Myrrdin

Cant explain why DeCarley looks strange for me. May be i am wrong but ....

RJO has only options on futures as far i understood.

IB are great and they have all i need but their auto-liquidation algorithm is worst i ever seen. Add their secret margin formula and it can be nightmare.

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  #20 (permalink)
Market Wizard
Linz Austria
 
Futures Experience: Advanced
Platform: Zaner360, TWS, Vantage
Broker/Data: DeCarley, IAB, RJO
Favorite Futures: Commodities
 
Posts: 1,099 since Nov 2014
Thanks: 1,447 given, 1,303 received
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alchemist74 View Post
Cant explain why DeCarley looks strange for me. May be i am wrong but ....

RJO has only options on futures as far i understood.

IB are great and they have all i need but their auto-liquidation algorithm is worst i ever seen. Add their secret margin formula and it can be nightmare.

You might want to open a second account - one for options on futures and IB (or someone else) for options on stocks.

There is another reason why I work with three brokers. I am concerned about counter party risk given the four bankruptcies in the FCM business in recent years. Thus, I have only about 1/3 of my capital with each broker. But this is of course also a matter of how large your account is.

Best regards, Myrrdin

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