Futures Options Span Margin (80% Restriction)

Understanding Buying Power and Volatility

Futures Options use Span Margin, which means your buying power requirements can increase when market volatility rises. This can affect your available funds for trading.

How the Options Auto Trader Manages Buying Power

To help you navigate these fluctuations, the Options Auto Trader has a built-in feature to manage your buying power allocation:

1. Uses 80% of Your Buying Power: The system will use only 80% of your set buying power allocation to determine how many open trades it can have at a single time.
2. Keeps 20% as a Buffer: The remaining 20% acts as a buffer to cover any increase in buying power needed due to volatility because when volatility increases so does your buying power on the current open trades that you have.

This approach helps ensure that you have sufficient funds available, even when the market becomes more volatile. By keeping a buffer, the Auto Trader aims to provide a smoother and more stable trading experience.

Why This Matters

Maintaining a buffer protects your investments and helps you avoid unexpected margin calls or the need to quickly add more funds. It allows for consistent trading without the stress of sudden market changes impacting your available buying power.

** This does NOT completely remove Span Margin risk as your buying power can easily increase by a large amount if volatility were to spike massively. Be aware of the risk, keep an eye on your buying power used, and never have more than 50% of your buying power in trades.

If you have any questions or need further assistance, please contact our support team.