It’s because their margin requirements are incredibly tight on short options (even if you have a long option offsetting it).

I know this because they once liquidated the short leg of a credit spread of mine (with a market order at a loss) and left me with a long put.

I recently switched to a cash account because of how damn touchy their margin maintenance system can be.

Today to my surprise I was prohibited from buying a cheap MAY 31 SPY 415C at 3:07 pm.

Even though I’m in a cash account, they still do margin calculations that liquidate or prohibit from opening LONG CALLS that you can’t afford to exercise LOL. Missed out on about 80% profit on my attempted trade.

Should’ve just used the next expiry but I was so pissed to encounter another margin requirement IN A CASH ACCOUNT that I couldn’t think straight.