What are the margin requirements for options?

What are the margin requirements for options?

C2's option margin calculation system is pretty basic, but it covers 80% of the real world. For example, we recognize most simple multi-legged option strategies, including spreads, strangles, and straddles; but we don't always recognize multi-multi-legged margin reductions from things like butterflies or condors, or multi-spreads.

Our advice is: Try to make it work with C2's (conservative) margining system. Remember that the issue is solely related to your C2 Model Account, not real-life trading accounts. That is, your AutoTraders will have the benefit of their own brokers' (more favorable) margin systems when it comes to their real-life accounts.

The implication is that C2's Model Account margin use is more conservative than real life, so your customers will be able to trade your system with less capital than the C2 Model Account shows (assuming they want to have the least amount of capital possible; not always the case, of course).

You are free to mention this in your system description, if you think that is helpful.

(Optional: Finally, if you want to raise the amount of capital in your C2 Model Account because you were anticipating different margin requirements, we can do this for you once at the outset. Your account will suddenly have more capital in it (and your historical trades will grow larger by the same amount; think of it like a reverse stock split). If this is something you want done, just reach out to us at the Help Desk and we'll try to accommodate.)

    • Related Articles

    • What are the margin requirements for futures?

      We use industry-standard SPAN margins. We don't support intraday margins* for any instruments except ES. *Intraday margins are a reduced margin requirement, sometimes allowed by the broker. Just because C2 doesn't allow their use in a C2 Model ...
    • Does my "Buy Power" include margin?

      Because C2's Model Account lets you trade many kinds of instruments from one margin pool (stocks, options, futures, forex), we display margin availability a bit different to what you might expect. We show "Buy Power" which is a good stand-in for ...
    • Collective2 Options Symbols

      The Options Symbology key consists of the following data elements: Security Symbol The security symbol will have a maximum of 5 characters and may contain digits. In those instances where there is a 5 character underlying with a corporate action, the ...
    • AutoTrade Setting - How to enable Short Options

      Missing out on STO option trades? By default, "No short options" is selected, but you can change this. From the AutoTrade settings page, you need to select "Allow short options". Here's how: Go to the AutoTrade Control Panel Click on Settings button ...
    • How Are Expiring Options Contracts Handled?

      If you own a long option position, and the option expires in-the-money, Collective2 will automatically exercise your position on the Saturday morning after expiration. This means you will buy or sell the underlying stock. Thus it's important that you ...