Margin-offset problem

[HeOfMuchDisgrunt]

This may be an unintended consequence of ESMA rules or just the FCA being stupid, but when I have an open short option position I pay the same initial margin as a futures contract no matter how far out of the money it is or regardless of having an offsetting long option position at a different strike to cap the possible loss. Worst of all, if the position  moves heavily in-the-money the short option requires much more variation margin but the long position doesn't credit my account with the unrealised profit, so I could be put on a massive margin call and not be able to trade anything else even though my overall position on the particular market has remained net neutral throughout the large move in the underlying.


I also have to post full margin on both sides of an option straddle/strangle which is ridiculous as you can only possibly lose on one side at expiry. 

Do IG recognise this as a problem and are they currently arguing it out with the FCA?

[BigDeal]

Whilst I agreed with many of the changes instigated by the ESMA to protect retail investors, I vehemently disagreed with the margin requirement rules such that you mention, and still think it is compete madness and without justification. 

[BigDeal]

On 17/08/2023 at 14:49, JohnnyRy said:

You have my sympathy. I'm in the US where CFD's are totally banned.

Fair point !