US Stock and Index Options Equity Requirements (Cash and Reg T Accounts Only)

The NYSE and NASD have imposed rules to limit small investor day trading. Customers that these organizations classify as Pattern Day Traders are subject to Day Trading Restrictions for US Securities.

Please note that Interactive Brokers utilizes option margin optimization software to try to create the minimum margin requirement. However, due to the system requirements required to determine the optimal solution, we cannot always guarantee the optimal combination in all cases.

For detailed information on IB's calculation methodology and where to find margin requirement information in the TWS, see our IB Margin Overview page.

The following table shows option margin requirements for each type of margin combination.

NOTE:

1. The following formulas make use of the functions Maximum (x, y, ..), Minimum (x, y, ..) and If (x, y, z). The Maximum function returns the greatest value of all parameters separated by commas within the parenthesis. As an example, Maximum (500, 2000, 1500) would return the value 2000. The Minimum function returns the least value of all parameters separated by commas within the parenthesis. As an example, Minimum (500, 2000, 1500) would return the value of 500. The If function checks a condition and if true uses formula y and if false formula z. As an example If (20 < 0, 30, 60) would return the value 60. Note also that Margin requirements quoted in US dollars may also be satisfied with a non-US Dollar equivalent.

2. Specific options with commodity-like behavior, such as VIX Index Options, have special spread rules and, consequently, may be required to meet higher margin requirements than a straightforward US equity option. Clients are urged to use the paper trading account to simulate an options spread in order to check the current margin on such spread.

Combination Type	Margin Accounts		Cash Accounts
	Initial	Maintenance	Initial and Maintenance
Long Call or Put	None. Long option cost is subtracted from cash.	None.	Initial: None. Long option cost is subtracted from cash. Maintenance: None.
Short Naked Call	100% * option market value + maximum (((20% * underlying market value) - out of the money amount), 10% * underlying market value, $2.50 * multiplier * number of contracts). 20% above is 15% for broad based index options. Short sale proceeds are applied to cash. Not allowed for IRA accounts.	Same as Initial.	N/A.
Short Naked Put	100% * option market value + maximum (((20% * (underlying market value) - out of the money amount), 10% * strike price, $2.50 * multiplier * number of contracts). 20% above is 15% for broad based index options. Short sale proceeds are applied to cash. Same rules as cash for IRA Margin Accounts.	Same as Initial.	100% of the aggregate put strike price.
Covered Calls and Puts Short an option with an equity position held to cover full exercise upon assignment of the option contract.	Initial stock margin requirement + 100% of in the money option value. Short sale option proceeds are applied to cash. Same rules as cash for IRA Margin Accounts.	Stock maintenance margin requirements + 100% of in the money option value.	Covered Calls Stock paid in full. Covered Puts N/A.
Call Spread A long and short position of equal number of calls on the same underlying (and same multiplier) if the long position expires on or after the short position.	(Maximum (aggregate long call strike - aggregate short call strike, 0)). Long call cost is subtracted from cash and short call proceeds are applied to cash.	Same as Initial.	(Maximum (aggregate long call strike - aggregate short call strike, 0)). Long call cost is subtracted from cash and short call proceeds are applied to cash. Both options must be European style cash settled.
Put Spread A long and short position of equal number of puts on the same underlying (and same multiplier) if the long position expires on or after the short position.	(Maximum (aggregate short put strike - aggregate long put strike, 0)). Long option cost is subtracted from cash and short option proceeds are applied to cash.	Same as Initial.	(Maximum (aggregate short put strike - aggregate long put strike, 0)). Long option cost is subtracted from cash and short option proceeds are applied to cash. Both options must be European style cash settled.
Collar Long put and long underlying with short call. Put and call must have same expiration date, same underlying (and same multiplier), and put exercise price must be lower than call exercise price.	(Initial stock margin requirement). Put option cost is subtracted from cash, short option proceeds are applied to cash. Same rules as cash for IRA Margin Accounts. Equity with Loan Value of long stock: Minimum (current market value, call aggregate exercise price).	Minimum (((10% * put exercise price) + out-of-the-money put amount), (25% * call exercise price)).	Stock paid in full. Long stock and put option cost is subtracted from cash, short option proceeds are applied to cash.
Long Call and Put Buy a call and a put.	Margined as two long options.	Same as Initial.	Same as Margin Account.
Short Call and Put Sell a call and a put.	If maximum (short call margin, short put margin) = short call margin then short call margin + put premium else short put margin + call premium. Short option proceeds are applied to cash. Not allowed for IRA accounts.	Same as Initial.	N/A.
Long Butterfly Two short options of the same series (class, multiplier, strike price, expiration) offset by one long option of the same type (put or call) with a higher strike price and one long option of the same type with a lower strike price. All component options must have the same expiration, same underlying, and intervals between exercise prices must be equal.	None. Long option cost is subtracted from cash and short option proceeds are applied to cash.	None.	N/A.
Short Butterfly Put Two long put options of the same series offset by one short put option with a higher strike price and one short put option with a lower strike price. All component options must have the same expiration, same underlying, and intervals between exercise prices must be equal.	(Aggregate put option highest exercise price - aggregate put option second highest exercise price). Long put cost is subtracted from cash and short put proceeds are applied to cash. Not allowed for IRA accounts.	Must maintain initial margin.	N/A.
Short Butterfly Call Two long call options of the same series offset by one short call option with a higher strike price and one short call option with a lower strike price. All component options must have the same expiration, same underlying, and intervals between exercise prices must be equal.	(Aggregate call option second lowest exercise price - aggregate call option lowest exercise price). Long option cost is subtracted from cash and short option proceeds are applied to cash. Not allowed for IRA accounts.	Must maintain initial margin.	N/A.
Long Box Spread Long call and short put with the same exercise price (“buy side”) coupled with a long put and short call with the same exercise price (“sell side”). Buy side exercise price is lower than the sell side exercise price. All component options must have the same expiration, and underlying (multiplier).	None. Long option cost is subtracted from cash, and short option proceeds are applied to cash.	None.	N/A.
Short Box Spread Long call and short put with the same exercise price (“buy side”) coupled with a long put and short call with the same exercise price (“sell side”). Buy side exercise price is higher than the sell side exercise price. All component options must have the same expiration, and underlying (multiplier).	MAX(102%*market-to-market value, strike differential*contract multiplier).	Must maintain initial margin.	N/A.
Conversion Long put and long underlying with short call. Put and call must have the same expiration date, underlying (multiplier), and exercise price.	(Initial stock margin requirement). Long stock and put cost is subtracted from cash, and short call proceeds are applied to cash. Equity with Loan Value of long stock: minimum (current market value, call aggregate exercise price).	(10% * aggregate exercise price).	Long stock and put option cost is subtracted from cash, short option proceeds are applied to cash.
Reverse Conversion Long call and short underlying with short put. Put and call must have same expiration date, underlying (multiplier), and exercise price.	(50% * short market value) + Maximum ((Put Exercise Price - Stock Market Price),0). Long call cost is subtracted from cash, short stock and put proceeds are applied to cash, and short position is subtracted from equity with loan value. Not allowed for IRA accounts.	(10% of Put Exercise price) + Maximum ((Put Exercise Price - Stock Market Price),0).	N/A.
Protective Put Long Put and Long Underlying.	(Initial stock margin requirement). Long stock and put cost is subtracted from cash. Same rules as cash for IRA Margin Accounts.	Minimum ((10% * aggregate put exercise price) + (100% * out of money amount), (stock maintenance margin requirement)).	Long stock and put option cost is subtracted from cash.
Protective Call Long Call and Short Underlying.	(Initial standard stock margin requirement). Long call cost is subtracted from cash, short stock proceeds are applied to cash, and short position is subtracted from equity with loan value. Not allowed for IRA accounts.	Minimum ((10% * aggregate call exercise price) + (100% * out of money amount), (stock maintenance margin requirement)).	N/A.