# Margin

## US Options Margin

The following calculations apply only to Margin, IRA Margin and Cash or IRA Cash. 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.

We use 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 we do 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.

Note:

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.

Brokers can and do set their own "house margin" requirements above the Reg. T or statutory minimum. For option spreads in VIX securities, we may charge an additional minimum house margin requirement of \$150. For option positions that meet the definition of a "universal" spread under CBOE Rule 12.3(a)(5), we may charge an additional house requirement of 102% of the net maximum market loss associated with the spread (i.e., net long option position price – net short option position price * 102%), if greater than the statutory requirement.

#### Combination Type

The following tables show option margin requirements for each type of margin combination. Click a link below to learn more:

#### Long Call or Put

 Margin Initial/RegT End of Day Margin None Maintenance Margin Same as Initial Cash or IRA Cash Same as Initial IRA Margin Same as Margin Account

#### Short Naked Call

 Margin Initial/RegT End of Day Margin 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 1In the Money Amount Maintenance Margin Same as Initial Cash or IRA Cash N/A IRA Margin Same as Cash Account

#### Short Naked Put

 Margin Initial/RegT End of Day Margin 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 1In the Money Amount Maintenance Margin Same as Initial Cash or IRA Cash Put Strike Price IRA Margin Same as Cash Account

#### Covered Calls

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

 Margin Initial/RegT End of Day Margin Initial Stock Margin Requirement + MAX((In the Money Amount),(MIN(price of the option),(price of the stock))) 4 Maintenance Margin Initial Stock Margin Requirement + MAX((In the Money Amount),(MIN(price of the option),(price of the stock))) 4 Cash or IRA Cash Stock paid in full or None IRA Margin Stock paid in full or None

#### Covered Puts

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

 Margin Initial/RegT End of Day Margin Initial Stock Margin Requirement + In the Money Amount Maintenance Margin Initial Stock Margin Requirement + In the Money Amount Cash or IRA Cash N/A IRA Margin N/A

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.

 Margin Initial/RegT End of Day Margin Maximum (Strike Long Call - Strike Short Call, 0) Maintenance Margin Same as Initial Cash or IRA Cash Same as Initial if both options are European-style cash-settled Otherwise, N/A. IRA Margin Same as Margin Account

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.

 Margin Initial/RegT End of Day Margin Maximum (Short Put Strike - Long Put Strike, 0) Maintenance Margin Same as Initial Cash or IRA Cash Same as Margin Account (Both options must be European style cash settled) Short Put Strike Price (American style options) IRA Margin 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.

 Margin Initial/RegT End of Day Margin Initial Stock Margin Requirement + In the Money Call Amount Equity with Loan Value of Long Stock Minimum (Current Market Value, Call Aggregate Exercise Price) Maintenance Margin Minimum (((10% * Put Exercise Price) + Out of the-Money Put Amount), (25% * Call Exercise Price)) Cash or IRA Cash None IRA Margin None

#### Long Call and Put

Buy a call and a put.

 Margin Initial/RegT End of Day Margin Margined as two long options. Maintenance Margin Same as Initial Cash or IRA Cash Same as Margin Account IRA Margin Same as Margin Account

#### Short Call and Put

Sell a call and a put.

 Margin Initial/RegT End of Day Margin 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 Maintenance Margin Same as Initial Cash or IRA Cash N/A IRA Margin 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.

 Margin Initial/RegT End of Day Margin None Maintenance Margin Same as Initial Cash or IRA Cash None Both options must be European-style cash-settled. IRA Margin 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.

 Margin Initial/RegT End of Day Margin ((Highest Put Options Strike - Middle Put Options Strike) + (Middle Put Options Strike - Lowest Put Option Strike)) Maintenance Margin Same as Initial Cash or IRA Cash N/A IRA Margin 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.

 Margin Initial/RegT End of Day Margin ((Highest Call Options Strike - Middle Call Options Strike) + (Middle Call Options Strike - Lowest Call Option Strike)) Maintenance Margin Must maintain initial margin. Cash or IRA Cash N/A IRA Margin 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).

 Margin Initial/RegT End of Day Margin None Maintenance Margin Same as Initial Cash or IRA Cash N/A IRA Margin 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).

 Margin Initial/RegT End of Day Margin MAX(1.02 x cost to close, Long Call Strike – Short Call Strike) Maintenance Margin Same as Initial Cash or IRA Cash N/A IRA Margin 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.

 Margin Initial/RegT End of Day Margin Initial Stock Margin Requirement + In the Money Call Amount Maintenance Margin 10% of the strike price + In the Money Call Amount Cash or IRA Cash N/A IRA Margin 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.

 Margin Initial/RegT End of Day Margin In the Money Put Amount + Initial Stock Margin Requirement Maintenance Margin In the Money Put Amount + (10% * Strike Price) Cash or IRA Cash N/A IRA Margin N/A

#### Protective Put

Long Put and Long Underlying.

 Margin Initial/RegT End of Day Margin Initial Stock Margin Requirement Maintenance Margin Minimum (((10% * Put Strike Price) + Put Out of the Money Amount), Long Stock Maintenance Requirement) Cash or IRA Cash None IRA Margin None

#### Protective Call

Long Call and Short Underlying.

 Margin Initial/RegT End of Day Margin Initial Standard Stock Margin Requirement Maintenance Margin Minimum (((10% * Call Strike Price) + Call Out of the Money Amount), Short Stock Maintenance Requirement) Cash or IRA Cash N/A IRA Margin N/A

#### Iron Condor

Sell a put, buy put, sell a call, buy a call.

 Margin Initial/RegT End of Day Margin Short Put Strike - Long Put Strike Maintenance Margin Same as Initial Cash or IRA Cash If all options are European and cash-settled, same as margin account. IRA Margin Same as Margin Account

###### Disclosures
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.

• 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.
• Due to regulatory restrictions, Interactive Brokers does not currently offer margin lending to natural persons who are residents of Australia.