💰 Capital Requirement of Options — What the Number Means

Right at the top of the dashboard sits the 💰 Capital Requirement of Options widget. It answers a question every option seller knows: "How much of my money is currently tied up in open options strategies — and how much breathing room do I have left?"

Most important first: The number doesn't come from your broker. It's not a margin requirement pulled from a broker API — sTraderZ.com calculates it itself, per open strategy, using fixed, traceable formulas that this chapter lays out in full. That makes the number comparable across brokers, but it also means: it's a planning figure, not an exact reproduction of what your broker is actually blocking as margin right now.

This chapter walks you through, in order:

• What the number is based on — the six calculation classes with their formulas, worked through with examples.
• How to use the widget — status bar, account cards, tag block, position table, and the ⚙️ leverage slider.
• Why accounts differ — and why the account type plays no role in it.
• One pitfall — the two different "leverages" on the same dashboard.

Every open options strategy is assigned to one of six calculation classes based on its recognized strategy type. Each class has its own formula:

Two worked examples:

• Short Put, strike €50, 1 contract, multiplier 100:
  50 × 100 × 1 = 5,000 € — exactly the amount you'd need if the shares were assigned to you.
• Bull Put Spread 50/45, 1 contract, premium received 1.20 $ per share (= 120 $ total):
  (5 × 100 × 1) − 120 = 380 $ — the maximum possible loss, since you can't lose more than the spread width minus the premium.

Details the formulas take into account:

• For an Iron Condor, only the wider of the two spread sides counts — the price can only land on one side at expiration, so only one side can produce a loss.
• For partially closed strategies, the premium received is scaled down proportionally to the contracts still open.
• Already expired option legs no longer tie up any capital and drop out of the calculation.
• All amounts are shown in EUR — converted using the exchange rate stored with the trade (or, failing that, an approximation table).

And what about the rest? Strategy recognition knows 41 strategy types in total — 22 of them are assigned to one of the six classes. The remaining 19 (e.g. Collar, Butterflies, Ratio Spreads, Backspreads, Jade Lizard, Double Calendar, Risk Reversal, as well as constructs recognized as "Custom"/"Unknown") have no clean, universally valid basis for calculation. They deliberately end up under "❓ not calculable" in the widget's footer — an honest gap beats a wrong number you'd take at face value.

Open short put contracts that aren't (yet) assigned to any recognized strategy are still calculated as Cash-Secured via a heuristic and shown in the footer as "Other / unclassified" — so no tied-up capital gets lost.

Here's what the expanded widget looks like with sample data (a simplified recreation — the numbers are fictional):

Let's go through the building blocks from top to bottom:

Header. The widget always starts collapsed — expanded, it's the tallest block on the dashboard. Collapsed, the header shows the key figures compactly (total requirement, utilization, mini bar); clicking the header expands and collapses it.

Status bar. At the very top you see the total requirement across all accounts, the utilization in percent (requirement ÷ cash balance), the free cash, and a traffic-light bar. The thresholds: below 70 % green, below 90 % yellow, above that red. Important to understand: the capital requirement is a subset of your cash balance, not an additional sum — "free" is simply what's left. If the requirement exceeds the cash balance (e.g. due to leverage), a red badge "▲ … over capacity" appears instead of the free amount.

Account cards. Each card shows the requirement, utilization bar, and cash balance of one account. Clicking a card filters the position table to that account (clicking again removes the filter). The cards have three states:

• Positive cash: percentage and traffic-light bar just like in the status bar (in the example: IBKR Account, 51 %).
• Account in the red (cash ≤ 0): there's no coverage at all — the card shows "> 100 %" with a full red bar instead of a calculated number, since requirement ÷ negative cash wouldn't yield a meaningful value (in the example: Margin Account).
• No account balance known: the requirement is still shown, only the utilization is left out (in the example: GmbH Account).

The small ×2 badge only appears on cards whose leverage divisor differs from 1.0 — the requirement shown on that card has then already been divided by the leverage. Accounts with no open options strategies at all don't appear as a card, only in the "… accounts with no capital requirement" line.

Tag block. Below that you see the capital tied up per tag — handy if you organize strategies like "Wheel" or "Vola" using tags. Clicking a row filters the table (multiple tags at once are possible, OR-combined). But watch out: tags aren't a breakdown — unlike account and strategy. A position can carry multiple tags, so the sums overlap and add up to more than the total requirement. That's exactly why the block shows individual bars stacked one below another instead of a single stacked bar (a stacked bar would imply a breakdown that doesn't exist) — and as soon as at least one position counts more than once, the ⚠️ notice appears with the affected symbols.

Position table. The table lists every open strategy with symbol, number of contracts, expiration date, tags, account, and requirement — grouped either by strategy or by account (toggle top right). An ℹ️ on the group row marks the approximation classes from Section 2. Clicking a row opens the trade detail modal — the same one used in "Open Positions". The footer collects the leftover items: "Other / unclassified" and "❓ … not calculable".

⚙️ Leverage. The button in the header opens a slider for each account:

The slider runs from 0.5 to 6.0 in steps of 0.05; the mark at 1.0 is the neutral point where the divisor changes nothing. The 💾 button only becomes active once you've changed the value. What the leverage actually does is explained in the next section.

First, the most common misunderstanding: the account type plays no role. Whether it's a cash account, margin account, or GmbH account — the same formulas from Section 2 apply to all of them. If two accounts show different utilization, there are exactly three possible sources:

What's the leverage divisor for? On a margin account, the broker actually only requires a fraction of the full cash coverage for a short put. If you work with leverage 2.0 there, you're telling the widget: "Credit me the fully-secured positions at half the capital outlay — that's actually how I trade." On a pure cash account, the slider belongs at 1.0. Values below 1.0 act as a deliberate safety buffer: requirement ÷ 0.8 shows more capital than the formula produces.

On the same dashboard you'll run into two values that are both called "leverage" — and that do fundamentally different things. They're accordingly easy to mix up:

Concretely: if the account table shows "1.45x", that's not a setting anyone made — it's a result. It means: this account carries 45 % more risk exposure than it has account value. You can't directly "change" this value; it only changes when your positions or your account value change.

The ⚙️ leverage in the Capital Requirement widget is the opposite: a number you set so the requirement calculation matches your margin framework. It doesn't measure anything — it scales the display.