ASX Options Margin Calculator

[bucket183]

I was wondering whether anyone has another Option Margin Calculator that I can check the ASX's estimate against. The reason why I asked is that last month I sold some Calls and Puts and the Calculator stated that the margin would be $4500ish ( I under that the ASX states that it will be within 10% or so) but the actual margin came in at over $7000 from the OCH. I even called the OCH to see what Margin Interval and Volitity were current but it was the same as what the ASX calculator was using.

Any I ideas or other calculators

 

[cutz]

Who are you trading with ?

The margin you are posting may include broker additional.

 

[bucket183]

RBS Morgans. I thought that too, but my broker assures me that they only pass on the och requirements. I'll be pissed if I find out otherwise.

 

[trader14]

The ASX margin Calculator is FLAWED! only works in some situations.
Does not give proper results for complex portfolio of options.

I wrote my own margin calculator using Peter Hoadley's Excel Option Addins.
I can now calculate portfolio margins in real time using live implied volatilies.

I would be interested in peoples experience in this area!

 

[ROE]

What the deal with comsec taking twice the margin on ach?
Are all brokers do this or is this a comsec special

Also i email comsec to take my nominated stocks for margin they still draw cold hard cash from My account argg ..

Anyone deal options with comsec...i am not a heavy users just writing naked put for stocks i want to own....

 

[cutz]

What the deal with comsec taking twice the margin on ach?
Are all brokers do this or is this a comsec special

No,

I think there may be some other aussie retail brokers that require double, maybe consider capping max loss in order to lower margin requirement.

Anyone deal options with comsec...i am not a heavy users just writing naked put for stocks i want to own....

Be careful here, assignment brokerage is extremely high, suggest buying stocks using discount brokerage rather than the assignment process.

 

[ROE]

Be careful here, assignment brokerage is extremely high, suggest buying stocks using discount brokerage rather than the assignment process.

What do you mean? I just start using options for income and stock purchase
And to me it doesnt look too bad because i have plenty of cash to cover any margin
Plus my massive stock holding..

This is essentially what i do.. Say i want some QBE at 1650 and i got the cash ready to go... I wrote a naked put with strike price 1700 expiring in May pocket 62c premium
And stock i write i know a lot about so the strike price likely not get exercise and i walk away with premium else i end up buying the stock which i dont mind at all.

Brokerage maybe more but the chance of me pocket a couple hundred buck is pretty good with some cash locked in the margin for a few months and get release back once the option expire...i dont intend to close any open sell position until it is exercise against me....panic and sharp shares drop off doesnt scare me and happy to buy at strike price

I got stocks that i will hold for decades so going to make sure comsec dont take my cash earning 5.5% but only take my stocks

 

[VSntchr]

This is something I am interested in also ROE. I dont have the capital to use such a strategy at the moment as I am still quite young...but I have been researching the method and have used options before.
Maybe when the 100 contract size options come in I will be able to have a go


Also do you think the strategy is useful to use for covered calls with a strike price that is above calculated value? I can see merit in this strategy also...but it does have a few downfalls that I am quite aware of..

 

[ROE]

This is something I am interested in also ROE. I dont have the capital to use such a strategy at the moment as I am still quite young...but I have been researching the method and have used options before.
Maybe when the 100 contract size options come in I will be able to have a go


Also do you think the strategy is useful to use for covered calls with a strike price that is above calculated value? I can see merit in this strategy also...but it does have a few downfalls that I am quite aware of..

Yeah very cool strategy for value investors ..I don't care about the trading side of it but I been researching and it's is awesome for writing covered call also.

Say I think a stock is overvalue in my holding I am happy to sell at X price for premium right now

I write a few sell call contracts on the buggers for a premium

shares never trades X price for the next few months I walk away with some
cash else someone can take off me for X price and happy for it to go because it is over value anyway

Yeah Exchange Trade Options only apply to top 20-50 or so stock so you do need large cash holding just in case the option get exercise and you have to buy the stock and of course margins which change on a daily basis based on the share price movement...

I got a lot of stocks for Collateral so I'm not too worry because stocks I put up for Collateral I don't intend to sell for the next couple of years.

I'm looking to write naked put on long term options for stocks I think under value in longer time frame.. I look for business where time is on its side, that mean it steady increase overtime so strike price will never be exercise and the buyer hold worthless options.....and if it does get exercise I want this business anyway....

I reckon options can be mis-price on a long term horizon against solid foundation business...

I'm still taking in a lot of information, options is one complex beast I'm in a sort of phase where I test write a few options with real money and applied some of knowledge and see where it is heading and I improve my thinking and logics over time... I don't have debt either or margin loan, everything in my account I own 100% so that is an added protection on my open options position...

and any options I write I'm fully funded by cash backing for the entire position should it get exercise against me ....I take every steps so I will not be force to off load any of my stocks holding because of my options positions...

I only write I don't buy ....

Happy to learn from all the ASF options player who has a lot more experience than I am, fire away anything I love to take it all in.

 

[wayneL]

Happy to learn from all the ASF options player who has a lot more experience than I am, fire away anything I love to take it all in.

***

I reckon options can be mis-price on a long term horizon against solid foundation business...

You could be on the right track for the type of investor you are, but could consider some enhancements as you gain knowledge.

One pedantic nitpick from me :

I don't like the term "mis-pricing" unless there is some genuine arbitrage opportunity. In practical terms, this never happens for retail investors.

I believe what you are really saying is that you believe the balance of directional and non-directional considerations (aka the Greeks) favour an option position rather than a long stock position.

That's fine and absolutely valid, but not a mis-pricing.

 

[builder2818]

What the deal with comsec taking twice the margin on ach?
Are all brokers do this or is this a comsec special

Also i email comsec to take my nominated stocks for margin they still draw cold hard cash from My account argg ..

Anyone deal options with comsec...i am not a heavy users just writing naked put for stocks i want to own....

I think you can use existing stock as collateral, you may have set up your account nominating your cash account to fund your margin requirements.

I trade options with commsec but wish it was a better set up. You can't do spreads in the one trade but have to enter each leg separately and they take twice the margin off you. I would prefer it it they locked your funds in your account, still earning interest then take twice the margin.

I also don't like how you cannot write options on stock you just purchased online and have to ring up and wait on hold for up to 20 mins sometimes to put a trade on. I have watched options prices become unfavourable for me while on hold with them. That plus the fact you have a separate options trading account for covered calls and other types of options trading. So if you wanted to do a ratio call spread on some stock you own which might have dropped in value, you need to pay twice the brokerage for the calls you write (time consuming also to have to switch the accounts during this process) plus the brokerage you pay to buy the corresponding option in the trade.

Hopefully with the options contract size changes coming in May they will update their website. I know there are better brokers but it is all convenient to have everything in the one account - meaning my salary going in every month and ATM access etc.

 

[ROE]

I think you can use existing stock as collateral, you may have set up your account nominating your cash account to fund your margin requirements.

I trade options with commsec but wish it was a better set up. You can't do spreads in the one trade but have to enter each leg separately and they take twice the margin off you. I would prefer it it they locked your funds in your account, still earning interest then take twice the margin.

I also don't like how you cannot write options on stock you just purchased online and have to ring up and wait on hold for up to 20 mins sometimes to put a trade on. I have watched options prices become unfavourable for me while on hold with them. That plus the fact you have a separate options trading account for covered calls and other types of options trading. So if you wanted to do a ratio call spread on some stock you own which might have dropped in value, you need to pay twice the brokerage for the calls you write (time consuming also to have to switch the accounts during this process) plus the brokerage you pay to buy the corresponding option in the trade.

Hopefully with the options contract size changes coming in May they will update their website. I know there are better brokers but it is all convenient to have everything in the one account - meaning my salary going in every month and ATM access etc.

Thanks I keep that in mind...

Yeah comsec for me is convenient, I have everything with Commonwealth
credit card, banking but wish they could be a bit more accommodating for more
than just buy and sell stocks...

Yeah going to call them Monday again and get them to use stocks as margin
so those thousand of bucks they took from my account can eat 5.5% interest...

 

[ROE]

You could be on the right track for the type of investor you are, but could consider some enhancements as you gain knowledge.

One pedantic nitpick from me :

I don't like the term "mis-pricing" unless there is some genuine arbitrage opportunity. In practical terms, this never happens for retail investors.

I believe what you are really saying is that you believe the balance of directional and non-directional considerations (aka the Greeks) favour an option position rather than a long stock position.

That's fine and absolutely valid, but not a mis-pricing.

Alrighty, you certainly know more than me will try not to use wrong term again
I'm new fish in the pond on this stuff just trying so I don't get eaten by bigger fish

 

[cutz]

You can't do spreads in the one trade but have to enter each leg separately and they take twice the margin off you.

I also don't like how you cannot write options on stock you just purchased online and have to ring up and wait on hold for up to 20 mins sometimes to put a trade on. I have watched options prices become unfavourable for me while on hold with them. That plus the fact you have a separate options trading account for covered calls and other types of options trading. So if you wanted to do a ratio call spread on some stock you own which might have dropped in value, you need to pay twice the brokerage for the calls you write (time consuming also to have to switch the accounts during this process) plus the brokerage you pay to buy the corresponding option in the trade..

The convenience below can never make up for the slippage and costs above.

Although you can ring up for combos, you do get charged the phone rate, over 200 bucks for a 4 legger, more with size, close or morph that trade before expiry and you may struggle to pull a profit even though your view was correct.

Oz brokers really need to sharpen their pencils in order to become more competitive, better front ends would also be useful.

Hopefully with the options contract size changes coming in May they will update their website. I know there are better brokers but it is all convenient to have everything in the one account - meaning my salary going in every month and ATM access etc.

 

[alex21]

Be careful here, assignment brokerage is extremely high, suggest buying stocks using discount brokerage rather than the assignment process.

I am using IB. I was surprised when I found that assignment of (for instance) put options cost me just a commission of option trade (it used to be $3 before options split at ASX). Furthermore when "overlapped" options were assigned - for instance c50 and p55 (the current price of underlying is, say, 52, so both options are in the money) then there is no commission at all.

So in the case of IB it is better to use option assignments rather than buy/sell stocks. For instance in case of CBA for buying 1000 shares: a commission is about $40, when you use assignment it is equal to $3.

However I've looked just at "fee" column in the IB's statements. Maybe there are hidden commissions somewhere else... Then my considerations are incorrect. In this case I would appreciate any information about IB's full commissions for option assignment.

 

[ironbark]

What the deal with comsec taking twice the margin on ach?
Are all brokers do this or is this a comsec special

ETRADE have the following quote in their options T&C

Our margin requirement for written options is twice the ASXC requirement.

 

[village idiot]

with Comsec it doesnt stop at twice the ASX margin; I wrote a some XJO options recently (which were hedged elsewhere). I have enough collateral with them to cover the comsec margin of twice the calculated ASX margin, yet I now get a phone call saying I fail the stress test , which basically requires me to have enough collateral to cover losses in the event the market dropped 25% tommorrow.

This pretty much means that the margin req is effectively 25% of the full value of the underlyings, which in this case is about 8 times the ASX margin requirements

 

[bluesjav]

It would be easy to place those combos or strategies if you have Palion /IRESS but you have to be careful that some of the individual legs might be priced high for Calls and you pay more bro. for both legs.