It seems my long part of the calendar spread got liquidated. It does not make sense to me. If I get margin call, the short part of the calendar spread should get liquidated.
Matthew, how about this issue?
When you have a margin call on your C2 account, the algorithm C2 currently uses is to liquidate first the position which is causing the smallest amount of loss. In other words, we go in order of loss-creation (least to most), in an effort to be as least disruptive to your account as possible.
I suppose a case could be made to liquidate short option positions before long positions, but – to be honest – the sequence in which we process margin calls is a lower priority software development project than others that we’re working on. So my suggestion is to just try to avoid getting margin calls for now, until we can explore different ways of handling the liquidation sequence.
To be honest, I think your algorithm to calculate margin call is wrong. Today I have SHLD Dec/Nov 170/175 Calendar(vertical) spread. The liquidation should reduce the margin required, however the liquidation of Dec 175 call increased the margin requirement because it turned out to net short of Nov 170 call.
Yes, you’re right, Star. I think C2 should handle margin calls in these situations differently – specifically: that short option positions should be liquidated before long ones. Let me try to get that implemented.
It won’t be instantaneous, though, so - in the meantime - try to avoid margin calls if you can help it.
Matte, I will try to avoid these kind of margin call. However, most option spread does not need margin. Such as calendar spread, vertical spread. The margin requirement is just the paid cost. I belive your algorithm calculates the margin seperately. For example, AMZN Nov 155/160 call spread only costs around 3, but your algorithm probably considers it as two different unrelated trades which may require a lot of margin.
