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Let's use an example. June CL 79 put is .0194 delta and a price of 0.10. IM is 240. 76 DTE.
The June 8.35 put is .0396 delta, 0.20 price and IM of 425.
The IM for the spread is 185.
The IM for the spread is less than the 79 naked put. Delta is the same. Net possible profit slightly less because of double fees. But you have a higher short strike for the spread. So it has more of a chance of being ITM than just the naked put.
But I also suspect that the spread will be more friendly if the futures move slowly against you. But there is a point when the spread will not be more friendly if futures get very close to your short strike.
The profit/loss chart on the trade calculator at OX has has mistakes in it for years. And they keep changing. They fix one thing and then something else goes wrong. Always verify the numbers on it.
A word of warning on NG options. The margin for April is 46% higher than for May contracts. May is 44% higher than June. So April is 111% higher than June.
So if you put on June contracts, if the CME doesn't change anything, then the margin required for them will jump considerably when they become front month options.
I suspect that will change eventually but this is the way it is right now.
I have notice that too about NG options, what exactly is the reasoning behind that? I do understand margin rising because of volatility but shouldn't that apply to all months? Does that mean that April is more volatile than May and May is more volatile than June?
So with NG, it's the reverse? With less days until expiration, the margin becomes higher?