Margin - Options


  • US Stock &
    Index Options
  • Canadian Stocks
    & Index Options
  • Non-US & Canadian
    Options

 

US Options

The following calculations apply only to Reg T, Reg T Margin - IRA and Cash Accounts. See our Portfolio Margin page for US Options requirements in a Portfolio Margin account.

FINRA and the NYSE have imposed rules to limit small investor day trading. Customers that these organizations classify as Pattern Day Traders are subject to Day Trading Restrictions for US Securities.

Atrium Trading utilizes option combination margin optimization software to try to create the minimum margin requirement. However, due to the system requirements required to determine the optimal solution, we cannot always guarantee the optimal combination in all cases.

Please note that Atrium Trading does not support option exercises, assignments or deliveries which may result in an account being non-compliant with margin requirements. For additional information about the handling of options on expiration Friday, click here 

These formulas make use of the functions Maximum (x, y, ..), Minimum (x, y, ..) and If (x, y, z). The Maximum function returns the greatest value of all parameters separated by commas within the paranthesis. As an example, Maximum (500, 2000, 1500) would return the value 2000. The Minimum function returns the least value of all parameters separated by commas within the paranthesis. As an example, Minimum (500, 2000, 1500) would return the value of 500. The If function checks a condition and if true uses formula y and if false formula z. As an example If (20 < 0, 30, 60) would return the value 60.

The following table shows option margin requirements for each type of margin combination.

Long Call or Put

Atrium Trading Initial/RegT 
End of Day 
Margin Account
None
Atrium Trading Maintenance
Margin Account
Same as Initial
Cash Accounts Same as Initial
Reg T Margin - IRA Same as Margin Account

Short Naked Call

Atrium Trading Initial/RegT 
End of Day 
Margin Account
Stock Options[1]
Call Price + Maximum ((20%[2] * Underlying Price - Out of the Money Amount), 
(10% * Underlying Price))

Index Options[1]
Call Price + Maximum ((15%[3] * Underlying Price - Out of the Money Amount), 
(10% * Underlying Price))

World Currency Options[1]
Call Price + Maximum ((4%[2] * Underlying Price - Out of the Money Amount), 
(0.75% * Underlying Price))

Cash Basket Option[1]
In the Money Amount
Atrium Trading Maintenance
Margin Account
Same as Initial
Cash Accounts N/A
Reg T Margin - IRA Same as Cash Account

Short Naked Put

Atrium Trading Initial/RegT 
End of Day 
Margin Account
Stock Options[1]
Put Price + Maximum ((20%[2] * Underlying Price - Out of the Money Amount), 
(10% * Strike Price))

Index Options[1]
Put Price + Maximum ((15%[3] * Underlying Price - Out of the Money Amount), 
(10% * Strike Price))

World Currency Options[1]
Put Price + Maximum ((4%[2] * Underlying Price - Out of the Money Amount), 
(0.75% * Underlying Price))

Cash Basket Option[1]
In the Money Amount
Atrium Trading Maintenance
Margin Account
Same as Initial
Cash Accounts Put Strike Price
Reg T Margin - IRA Same as Cash Account

Covered Calls & Puts

Short an option with an equity position held to cover full exercise upon assignment of the option contract.

Atrium Trading Initial/RegT 
End of Day 
Margin Account
Initial Stock Margin Requirement + In the Money Amount[4]
Atrium Trading Maintenance
Margin Account
Initial Stock Margin Requirement + In the Money Amount[4]
Cash Accounts Covered Calls
Stock paid in full

Covered Puts
N/A
Reg T Margin - IRA Covered Calls
None

Covered Puts
N/A

Call Spread

A long and short position of equal number of calls on the same underlying (and same multiplier) if the long position expires on or after the short position.
   
Atrium Trading Initial/RegT 
End of Day 
Margin Account
Maximum (Strike Long Call - Strike Short Call, 0)
Atrium Trading Maintenance
Margin Account
Same as Initial
Cash Accounts Same as Initial if both options are European-style cash-settled 

Otherwise, N/A.
Reg T Margin - IRA Same as Margin Account

Put Spread

A long and short position of equal number of puts on the same underlying (and same multiplier) if the long position expires on or after the short position.
   
Atrium Trading Initial/RegT 
End of Day 
Margin Account
Maximum (Short Put Strike - Long Put Strike, 0)
Atrium Trading Maintenance
Margin Account
Same as Initial
Cash Accounts Same as Margin Account

Both options must be European style cash settled.
Reg T Margin - IRA Same as Margin Account

Collar

Long put and long underlying with short call. Put and call must have same expiration date, same underlying (and same multiplier), and put exercise price must be lower than call exercise price.
   
Atrium Trading Initial/RegT 
End of Day 
Margin Account
Initial Stock Margin Requirement + In the Money Call Amount

Equity with Loan Value of Long Stock
Minimum (Current Market Value, Call Aggregate Exercise Price)
Atrium Trading Maintenance
Margin Account
Minimum (((10% * Put Exercise Price) + Out of the-Money Put Amount), 
(25% * Call Exercise Price))
Cash Accounts N/A
Reg T Margin - IRA N/A

Long Call & Put

Buy a Call and a Put
   
Atrium Trading Initial/RegT 
End of Day 
Margin Account
Margined as two long options.
Atrium Trading Maintenance
Margin Account
Same as Initial
Cash Accounts Same as Margin Account
Reg T Margin - IRA Same as Margin Account

Short Call & Put

Sell a Call and a Put
   
Atrium Trading Initial/RegT 
End of Day 
Margin Account
If Initial Margin Short Put > Initial Short Call,
then Initial Margin Short Put + Price Short Call 

else 

If Initial Margin Short Call >= Initial Short Put, 
then Initial Margin Short Call + Price Short Put
Atrium Trading Maintenance
Margin Account
Same as Initial
Cash Accounts N/A
Reg T Margin - IRA N/A

Long Butterfly

Two short options of the same series (class, multiplier, strike price, expiration) offset by one long option of the same type (put or call) with a higher strike price and one long option of the same type with a lower strike price. All component options must have the same expiration, same underlying, and intervals between exercise prices must be equal.
   
Atrium Trading Initial/RegT 
End of Day 
Margin Account
None
Atrium Trading Maintenance
Margin Account
Same as Initial
Cash Accounts None

Both options must be European-style cash-settled.
Reg T Margin - IRA Same as Margin Account

Short Butterfly Put

Two long put options of the same series offset by one short put option with a higher strike price and one short put option with a lower strike price. All component options must have the same expiration, same underlying, and intervals between exercise prices must be equal.
   
Atrium Trading Initial/RegT 
End of Day 
Margin Account
((Highest Put Options Strike - Middle Put Options Strike) + 
(Middle Put Options Strike = Lowest Put Option Strike))
Atrium Trading Maintenance
Margin Account
Same as Initial
Cash Accounts N/A
Reg T Margin - IRA N/A

Short Butterfly Call

Two long call options of the same series offset by one short call option with a higher strike price and one short call option with a lower strike price. All component options must have the same expiration, same underlying, and intervals between exercise prices must be equal.
   
Atrium Trading Initial/RegT 
End of Day 
Margin Account
((Highest Call Options Strike - Middle Call Options Strike) + 
(Middle Call Options Strike = Lowest Call Option Strike))
Atrium Trading Maintenance
Margin Account
Must maintain initial margin.
Cash Accounts N/A
Reg T Margin - IRA N/A

Long Box Spread

Long call and short put with the same exercise price ("buy side") coupled with a long put and short call with the same exercise price ("sell side"). Buy side exercise price is lower than the sell side exercise price. All component options must have the same expiration, and underlying (multiplier).
   
Atrium Trading Initial/RegT 
End of Day 
Margin Account
None
Atrium Trading Maintenance
Margin Account
Same as Initial
Cash Accounts N/A
Reg T Margin - IRA Same as Margin Account

Short Box Spread

Long call and short put with the same exercise price ("buy side") coupled with a long put and short call with the same exercise price ("sell side"). Buy side exercise price is higher than the sell side exercise price. All component options must have the same expiration, and underlying (multiplier).
   
Atrium Trading Initial/RegT 
End of Day 
Margin Account
American Style
Maximum (((Long Call Price + Long Put Price - Short Call Price = Short Put Price) * -102%), (Long Call Strike - Short Call Strike)) 

European Style
Long Call Strike - Short Call Strike
Atrium Trading Maintenance
Margin Account
Same as Initial
Cash Accounts N/A
Reg T Margin - IRA Same as Margin Account

Conversion

Long put and long underlying with short call. Put and call must have the same expiration date, underlying (multiplier), and exercise price.
   
Atrium Trading Initial/RegT 
End of Day 
Margin Account
Initial Stock Margin Requirement

Equity with Loan Value of Long Stock
Minimum (Current Market Value, Call Aggregate Exercise Price)
Atrium Trading Maintenance
Margin Account
10% * Strike Price
Cash Accounts N/A
Reg T Margin - IRA N/A

Reverse Conversion

Long call and short underlying with short put. Put and call must have same expiration date, underlying (multiplier), and exercise price.
   
Atrium Trading Initial/RegT 
End of Day 
Margin Account
In the Money Put Amount + Initial Stock Margin Requirement
Atrium Trading Maintenance
Margin Account
In the Money Put Amount + (10% * Strike Price)
Cash Accounts N/A
Reg T Margin - IRA N/A

Protective Put

Long Put and Long Underlying.
   
Atrium Trading Initial/RegT 
End of Day 
Margin Account
Initial Stock Margin Requirement
Atrium Trading Maintenance
Margin Account
Minimum (((10% * Put Strike Price) + Put Out of the Money Amount), 
Long Stock Maintenance Requirement)
Cash Accounts N/A
Reg T Margin - IRA N/A

Protective Call

Long Call and Short Underlying.
   
Atrium Trading Initial/RegT 
End of Day 
Margin Account
Initial Standard Stock Margin Requirement
Atrium Trading Maintenance
Margin Account
Minimum (((10% * Call Strike Price) + Call Out of the Money Amount), 
Short Stock Maintenance Requirement)
Cash Accounts N/A
Reg T Margin - IRA N/A

Iron Condor

Sell a put, buy put, sell a call, buy a call.
   
Atrium Trading Initial/RegT 
End of Day 
Margin Account
Short Put Strike - Long Put Strike
Atrium Trading Maintenance
Margin Account
Same as Initial
Cash Accounts If all options are European and cash-settled, same as margin account.
Reg T Margin - IRA Same as Margin Account


  • Specific options with commodity-like behavior, such as VIX Index Options, have special spread rules and, consequently, may be required to meet higher margin requirements than a straightforward US equity option. Clients are urged to use the paper trading account to simulate an options spread in order to check the current margin on such spread.
  • If a combination of options is put on in such a way that a specific strategy is optimal at that point in time, the strategy may remain in place until the account is revalued even if it does not remain the optimal strategy. A revaluation will occur when there is a position change within that symbol. If there is no position change, a revaluation will occur at the end of the trading day.
  1. Minimum charge of USD 2.50 per share of underlying. This minimum does not apply for End of Day Reg T calculation purposes.
  2. For Leverage Options, Minimum (20% * Leverage Factor, 100%).
  3. For Leverage Options, Minimum (15% * Leverage Factor, 100%)
  4. For Covered Basket Calls, (short basket call, long component stocks), the margin requirement is for all the component stocks.

 

Canadian Stock and Index Options Requirements

FINRA and the NYSE have imposed rules to limit small investor day trading. Customers that these organizations classify as Pattern Day Traders are subject to Day Trading Restrictions for US Securities.

Please note that Interactive Brokers utilizes option margin optimization software to try to create the minimum margin requirement. However, due to the system requirements required to determine the optimal solution, we cannot always guarantee the optimal combination in all cases.

These formulas make use of the functions Maximum (x, y, ..), Minimum (x, y, ..) and If (x, y, z). The Maximum function returns the greatest value of all parameters separated by commas within the paranthesis. As an example, Maximum (500, 2000, 1500) would return the value 2000. The Minimum function returns the least value of all parameters separated by commas within the paranthesis. As an example, Minimum (500, 2000, 1500) would return the value of 500. The If function checks a condition and if true uses formula y and if false formula z. As an example If (20 < 0, 30, 60) would return the value 60.

The following table shows option margin requirements for each type of margin combination.

 

Long Call or Put

Atrium Trading Initial 
Margin Account
None. Long option cost is subtracted from cash.
Atrium Trading Maintenance
Margin Account
None.
Cash Accounts None. Long option cost is subtracted from cash.

Short Naked Call

Atrium Trading Initial
Margin Account
Stock Options[1]
Call Price + Maximum (((30% * Underlying Price) - Out of the Money Amount),
10% * Underlying Price) 

Index Options[1]
Call Price + Maximum (((15% * Underlying Price) - Out of the Money Amount),
10% * Underlying Price)
Atrium Trading Maintenance
Margin Account
Same as Initial
Cash Accounts N/A

Short Naked Put

Atrium Trading Initial
Margin Account
Stock Options[1]
Put Price + Maximum (((30% * (Underlying Price) - Out of the Money Amount), 
10% * Strike Price) 

Index Options[1]
Put Price + Maximum (((15% * (Underlying Price) - Out of the Money Amount), 
10% * Strike Price)
Atrium Trading Maintenance
Margin Account
Same as Initial
Cash Accounts Aggregate Put Strike Price

Covered Calls & Puts

Short an option with an equity position held to cover full exercise upon assignment of the option contract.

Atrium Trading Initial
Margin Account
Initial Stock Margin Requirement + In the Money Amount
Atrium Trading Maintenance
Margin Account
Same as Initial
Cash Accounts Covered Calls
Stock paid in full

Covered Puts
N/A

Call Spread

A long and short position of equal number of calls on the same underlying (and same multiplier) if the long position expires on or after the short position.
   
Atrium Trading Initial
Margin Account
Maximum (Strike Long Call - Strike Short Call, 0)
Atrium Trading Maintenance
Margin Account
Same as Initial
Cash Accounts Same as Initial if both options are European-style cash-settled 

Otherwise, N/A.

Put Spread

A long and short position of equal number of puts on the same underlying (and same multiplier) if the long position expires on or after the short position.
   
Atrium Trading Initial
Margin Account
Maximum (Short Put Strike - Long Put Strike, 0)
Atrium Trading Maintenance
Margin Account
Same as Initial
Cash Accounts Same as Margin Account

Both options must be European style cash settled.

Collar

Long put and long underlying with short call. Put and call must have same expiration date, same underlying (and same multiplier), and put exercise price must be lower than call exercise price.
   
Atrium Trading Initial
Margin Account
Initial Stock Margin Requirement + In the Money Call Amount
Atrium Trading Maintenance
Margin Account

In the Money Call Amount + Minimum (((10% * Put Strike Price) + Out of the
Money Put Amount), (30% * Strike Call))

Cash Accounts N/A

Long Butterfly

Two short options of the same series (class, multiplier, strike price, expiration) offset by one long option of the same type (put or call) with a higher strike price and one long option of the same type with a lower strike price. All component options must have the same expiration, same underlying, and intervals between exercise prices must be equal.
   
Atrium Trading Initial
Margin Account
None
Atrium Trading Maintenance
Margin Account
Same as Initial
Cash Accounts None

Both options must be European-style cash-settled.

Conversion

Long put and long underlying with short call. Put and call must have the same expiration date, underlying (multiplier), and exercise price.
   
Atrium Trading Initial
Margin Account
Initial Stock Margin Requirement + In the Money Call Amount
Atrium Trading Maintenance
Margin Account
In the Money Call Amount + (10% * Strike Price)
Cash Accounts N/A

Reverse Conversion

Long call and short underlying with short put. Put and call must have same expiration date, underlying (multiplier), and exercise price.
   
Atrium Trading Initial
Margin Account
In the Money Put Amount + Initial Stock Margin Requirement
Atrium Trading Maintenance
Margin Account
In the Money Put Amount + (10% * Strike Price)
Cash Accounts N/A

Protective Put

Long Put and Long Underlying.
   
Atrium Trading Initial
Margin Account
Initial Stock Margin Requirement
Atrium Trading Maintenance
Margin Account
Minimum (((10% * Put Strike Price) + Put Out of the Money Amount), 
Long Stock Maintenance Requirement)
Cash Accounts N/A

Protective Call

Long Call and Short Underlying.
   
Atrium Trading Initial
Margin Account
If Trading Currency is CAD
Minimum(Strike Long Call, Initial Stock Margin Requirement) 

If Trading Currency is not CAD
Call Price + (30% * Underlying Price) + Minimum (Out of the Money Amount, 
(30% * Underlying Price))
Atrium Trading Maintenance
Margin Account
If Trading Currency is CAD
Minimum(Strike Long Call, Maintenance Stock Margin Requirement) 

If Trading Currency is not CAD
Call Price + (30% * Underlying Price) + Minimum (Out of the Money Amount, 
(30% * Underlying Price))
Cash Accounts N/A

  1. Minimum charge of USD 2.50 per share of underlying. This minimum does not apply for End of Day Reg T calculation purposes.


 

Non-US/Non-Canadian Options Margin Requirements

Margin requirements are determined by risk based portfolio analysis models specified by each exchange. For specific details, visit the specific exchange site in question. US Reg T Margin requirements are also applied at the end of each trading day. For more information, see the US Stock and Index Options tab above.

For Australian single stock options, we apply US rule-based and Reg T margin requirements.


 

Interactive Brokers
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