When will you support Index options?

Alpaca Products Discussion Alpaca Questions
1

HI,
When will you support trading SPX, XSP, and VIX options?

2

I had this question too and this is the reply I got from them::

This feature is currently on our roadmap; however, we do not have an estimated timeline for its release at this time.

We have recently launched Options Trading Level 3 and are actively working on expanding trading options further.

3

+1 this should indeed be a priority

4

Cant wait for SPX trading

5

@D_A Support for index options is an active project expected to be completed this year. Initially, there will be support for cash-settled index options SPX, SPXW, OEX, DJX, VIX, and XSP.

Last month included a few milestones, and there doesn’t seem to be any major roadblocks at the moment.

  • First test trade (~Mar 7)
  • Clearing validation (Mar 20)
  • Market data pipeline validation (Mar 26)
6

Thanks for the update Dan, this is great news. Any more detail on the timeframe, don’t need an exact date, but Q2, Q3 or Q4 would be great to know.

7

Dan, do you know if there will be any plans to support Portfolio Cross-Margining once index futures are introduced? Otherwise the capital efficiency benefits of shorting futures as a hedge cannot be achieved and large amount of cash needs to be reserved to cover the futures short positions in case of a drawdown, which could otherwise be offset by the long-side portfolio gains.

Below is the summary from AI on the current state of affairs:

How Alpaca Currently Structure Margin

  • Fixed Reg T Ratios: Alpaca enforces a strict 50% initial margin requirement for purchasing marginable equities and a 25% standard overnight maintenance margin.

  • No Dynamic Offsets: Under standard Reg T, long equity positions and short positions are evaluated as independent lines of risk. The system does not dynamically calculate risk correlations to slash your overall margin requirement just because one position hedges the other.

  • Buying Power Limits: They cap standard intraday buying power at exactly 4x (for Pattern Day Traders) and overnight buying power at exactly 2x your account equity. True portfolio margin systems regularly allow 6x to 10x leverage on highly hedged portfolios. [1, 2]

What This Means for Your Futures Roadmap

Because Alpaca does not offer true portfolio cross-margining today, when they do introduce futures, they will likely launch them in a separate sub-account structure (or an isolated risk segment) under Reg T guidelines. This means: [1]

  1. You would still face separate equity margin rules and futures margin rules.

  2. The cash generated by a long equity rally will not automatically clear the daily cash settlement loss on your short futures position in real-time. [1, 2]

8

What’s the latest? I’m very keen to trade SPX 0DTEs ASAP.