Options - margin and stops

[Dillywolly]

Hi

 

Couple of queries relating to US 500 options:

 

1. Why is there no information on margin requirements and different tiers on the app?

2. Why is it not possible to place a stop loss and order trades?

 

Thanks

Alex

 

[JamesIG]

Hi. When it comes to options margins are slightly different. As you can expect, buying the option will be the most you can lose, i.e. size time premium. When you are selling the option, you would have the same margin as if you were trading on the corresponding DFB market. 

 

Also, because we don't give clients access to trade DMA, we only accept fills via OTC deals. This means that you can't set the equivalent of orders 'on the book' which constitutes stops / limits due to the fact this is a volatility product. 

[Dillywolly]

Thanks james

 

When you say the same margins as the DFB, do you mean the margin required for trading for the underlying asset, in this case the S&P500 index?

 

Regarding DMA, am I right in thinking clients can trade DMA under some circumstances?

 

Alex

[JamesIG]

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wrote:

Thanks james

 

When you say the same margins as the DFB, do you mean the margin required for trading for the underlying asset, in this case the S&P500 index?

 

Regarding DMA, am I right in thinking clients can trade DMA under some circumstances?

 

Alex

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Sorry  - let me try and clarify. 

 

In regards to your first point: say you are selling a call at £100/pt. You margin would be exactly the same as if you were selling £100/pt of the S&P with IG with no stop. The margin for this particular market is as below. 

 

 

In regards to your second point: when I am referring to DMA in this context it's specifically in regards to options. Basically you can't put your trade on the options chain. When it comes to shares DMA, or FX DMA you can. Please check the links for more info, and if I can help further just shout