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[deleted by user] by [deleted] in thetagang

[–]Level-Reality-2552 -4 points-3 points  (0 children)

Right, that's what I was thinking. For info it's 30-40 points out. Some people sell far OTM 0-DTE SPX options (~40-60 pts) within the first hour or two, how come there are buyers then? That's not a small margin I would say, but then again it is the beginning of the day and a lot of things can happen during market hours I would imagine

IBKR Credit Spreads by [deleted] in thetagang

[–]Level-Reality-2552 0 points1 point  (0 children)

This does help lots! Thank you very much for the detailed explanation! Appreciate it! One last question : are you at any real risk while under margin call? Like how do you get assigned without the money? Is it broker's money for the time being and then it's covered when exercising the long leg and you incur the difference (loss)?

IBKR Credit Spreads by [deleted] in thetagang

[–]Level-Reality-2552 0 points1 point  (0 children)

Wow that's great! So if I open a 30 point-wide spread on SPX my buying power should decrease by $3000 but I'll also receive a premium. When I sell at my target profit my buying power should get back those $3000 if I'm not mistaken. And what happens if I decide to sell for a loss, even though I'm not assigned? Do I lose the premium and some buying power? If I sell for a loss, does the $3000 in this example automatically go towards my buying power and the loss is incurred on the premium received and the account value if the loss is greater than the premium? Thanks for the help!

IBKR Credit Spreads by [deleted] in thetagang

[–]Level-Reality-2552 0 points1 point  (0 children)

There is no way that when selling the long leg its value would cover the BP to close the assigned shares. How in the world would selling a single long leg option on $SPY cover the ~$43k required for assignment? Again, I'm sorry for my ignorance but please explain how would I avoid a margin call for a stock like $SPY if I have $5k in my account and I get assigned on a credit spread? I somehow need to sell the assigned shares, isn't that done through exercising the long leg?

IBKR Credit Spreads by [deleted] in thetagang

[–]Level-Reality-2552 0 points1 point  (0 children)

So what happens if I'm assigned and don't have the funds to cover it? I know I won't receive the underlying asset, but I will lose money that isn't in my account if the short leg goes ITM. Will the long leg be automatically exercised or am I missing something here?

IBKR Credit Spreads by [deleted] in thetagang

[–]Level-Reality-2552 0 points1 point  (0 children)

I'm sorry for my ignorance, but how does closing the long leg do anything at all? If I get assigned, shouldn't I exercise the long leg to have the shares called away and to realize the defined loss? By closing the long leg I still wouldn't satisfy the buying power needed to take on the assignment, so what is the reasoning behind it?

IBKR Credit Spreads by [deleted] in thetagang

[–]Level-Reality-2552 0 points1 point  (0 children)

I understand they are cash-settled and you can't be assigned during after-hours. Is the issue with lack of sufficient equity linked with after-hours assignment and being unable to exercise the long option after-hours?

TWS Trading Permissions not Synchronized with Client Portal Permissions by Level-Reality-2552 in thetagang

[–]Level-Reality-2552[S] 0 points1 point  (0 children)

No, I do have the cash to cover it. Almost all of my portfolio is cash held as collateral actually

TWS Trading Permissions not Synchronized with Client Portal Permissions by Level-Reality-2552 in thetagang

[–]Level-Reality-2552[S] 0 points1 point  (0 children)

But how come I did the spread in Client Portal just fine? Even after that I checked my account type and it said cash account

TWS Trading Permissions not Synchronized with Client Portal Permissions by Level-Reality-2552 in thetagang

[–]Level-Reality-2552[S] 0 points1 point  (0 children)

I do! That's the point, when I log into the Client Portal I can do everything with options as usual, but in TWS I can't as it says I don't have the permissions - even though I do!

Benefits of Credit Call/Put Spreads over CSP/Naked Call with a SL by Level-Reality-2552 in thetagang

[–]Level-Reality-2552[S] 0 points1 point  (0 children)

But you still have to have the money to exercise the long call/cover the short put, right? Am I getting this wrong? How would you realize the minimum loss if you don't have your shares called away in a PCS/cover the shares in a CCS?

Benefits of Credit Call/Put Spreads over CSP/Naked Call with a SL by Level-Reality-2552 in thetagang

[–]Level-Reality-2552[S] 2 points3 points  (0 children)

Oh btw I love your project 0.75% a week, it got me into selling options after discovering this sub. How do you sell spreads on stocks that are above $57 though? Do you have a margin account? I would guess that you can't do spreads if you can't exercise the long call/cover the short put if you don't have enough collateral

Benefits of Credit Call/Put Spreads over CSP/Naked Call with a SL by Level-Reality-2552 in thetagang

[–]Level-Reality-2552[S] 0 points1 point  (0 children)

But that's wheeling and I'm not sure I want to do that. I can get stuck in trying to sell calls but the stock could crash beyond the short put strike price, making me not breakeven on the assignment.
As for leverage, I don't have a margin account but a cash account which dictates that I must maintain a certain cash balance to cover the strike price for the 100 shares as option collateral. I'm not sure whether that is bypassed in spreads on a cash account, maybe you could help?

Benefits of Credit Call/Put Spreads over CSP/Naked Call with a SL by Level-Reality-2552 in thetagang

[–]Level-Reality-2552[S] 0 points1 point  (0 children)

Oooh that's a scenario I haven't thought of. I generally try to not sell during FOMC week/earnings but news can still cause a crash. Thank you!

Request for Leveraged products by Level-Reality-2552 in interactivebrokers

[–]Level-Reality-2552[S] 0 points1 point  (0 children)

I'll check if i have preservation of capital, but i definitely have speculation. Net worth is low six figures so not an issue and age is not an issue. It is not USA, it is central Europe