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propslave

Registered: Nov 2008
Posts: 64

04-22-12 03:16 PM

Is 30% * the underlying market value the standard for naked call selling margin requirements at brokerages (in Canada)? Are lower margin requirements for naked call selling available anywhere?

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hajimow

Registered: Mar 2004
Posts: 2659

04-23-12 01:09 AM

who is your broker?
naked call for what strike price? ATM? ITM? OTM?
Index or normal stocks?
Porfolio margin or reg T?

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propslave

Registered: Nov 2008
Posts: 64

04-23-12 02:34 PM

It doesn't matter.

I'm asking about the formula used to calculate margin for selling naked calls. The standard formula for equities (not index) is the underlying * .30 (+-) the amount ITM or OTM - the premium received.

I'm just curious if that 30% is standard in Canada or if it's lower at some brokerages.

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rmorse

Registered: Apr 2011
Posts: 1056

04-23-12 02:43 PM

In the US there are two methods of calculating margin. Reg-T and CPM. Reg-T is cash based and CPM is risk based. To get a better idea of the margin required for a specific position, try these links.

REG-T: http://www.cboe.com/tradtool/mcalc/default.aspx

CPM: http://apps.theocc.com/pmc/pmc.do

Let me know if you need any help with either calculator.

Bob

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propslave

Registered: Nov 2008
Posts: 64

04-23-12 06:08 PM

Thanks for the links.

In the first link the margin calculation is based on 20% - so I know that in the US their are brokerages that offer naked calls based on using 20% * the underlying in the calculation. I don't believe this is the case in Canada.

So to clarify my question, does anyone know of any brokerages in Canada that use 20% * the price of the underlying to calculate margin, or is 30% required by all Canadian brokerages?

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