Re: [TheOptionClub.com] Worst Case Margin

 

First you need to know which margin you have.

- I have RegT

"If the market is acting erratically the broker will lock more than the spread is worth. ... I have seen it time and time again that a broker will liquidate positions if you have enough positions. It seems that if you have position risk at times of unexpected volatility the broker will be more conservative. And even if you don't they will do things to keep it simple for them. Yes it sounds illogical, but I have witnessed it first hand when a broker liquidates even though we left padding..."

I'm grateful Christian that you thought to inform me of an extreme example in your trading past. I'm all about extreme examples. Based on the example of my original inquiry, and in light of your 'illogical' trading margin situation from the past, If the 925 by 900 credit spread example was the position your old broker liquidated on you based on higher margin requirement, what amount over $1250 would have saved you this grief. Granted this is a hypothetical, but I'd still appreciate a number to wrap my head around.

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