Hi all, my short SPX box spread doubled in margin req since transitioning to Scwab.
I have talked to support and they are aware of the issue, but claim that I am 1/100 users with this problem and so it falls low on the totem pole ATM.
That said, this issue puts my account negative cash and prevents me from trading. Support mentioned they think a short box using ES options may circumvent the issue (though I have no clue why) and I am considering closing the short SPX box to open a short ES box.
I'm curious to hear from folks if there are any types of things I don't understand about ES options that may make this a bad idea or that I should at least consider, on the surface it sounds like a fine way to drop in a replacement but I just don't know. Out of the 5.6k I would have paid over the life of this box, it appears it will take about 2.3k to close it out now, if that information matters.
Thanks in advance for any thoughts and considerations all.
Margin reqs out of whack after Schwab transition
byu/pressed4juice inoptions
Posted by pressed4juice
3 Comments
Do you have portfolio margin?
What’s the margin requirement on your box now? When I analyze a short box trade the margin required is basically 0 in my pm account, but maybe the actual margin they’d want is out of whack with what tos shows in the analyze tab? On the futures question, I’d interpret what you said to mean they think a futures position might work correctly since the margin calculation would be based on span margin rules. Kind of concerning that they don’t know.
Also maybe I’m missing something as I’ve only done long boxes but how does the margin change change your cash balance? Or are you saying if you’re forced to close the box due to the margin increase then you’ll go cash negative?
I’ve had a similarly niche issue with the info they provide for spx unrealized gains and while they tried to help and did eventually understand the issue, they similarly pointed out very few other people will have my issue. My viewpoint is obviously that they are unprepared for more complex trading strategies being implemented by the customers they paid to acquire from TD. They didn’t know what they didn’t know. There was a reason some of us were at TD instead of a dinosaur like Schwab.
Sure, just stay out of the quarterly expirations as they are American style.