What is the margin on an Iron Condor option strategy?
If an iron condor strategy exists in the account, then the margin requirement on that strategy will be the margin on one of the spreads in that iron condor. If the margin requirements on each individual spread is different, then IB will use the requirement that is greater.
To determine what the actual margin will be, calculate the margin requirement for each individual side of the condor:
For the call spread side, the margin requirement = (Maximum (aggregate long call strike - aggregate short call strike, 0)). The long call cost is subtracted from cash and short call proceeds are applied to cash.
For the put spread side, the margin requirement = (Maximum (aggregate short put strike - aggregate long put strike, 0)). The long option cost is subtracted from cash and short option proceeds are applied to cash.
Whichever of these formulas results in the higher requirement, that is the requirement that will be used.
*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. It is possible that given the option positions in the account, the iron condor you are trying to create will not be recognized as such.