yeah I know... that's the part that has him confused. The broker holds the $380, and they freeze $20. Their $400 is covered. Dude's gotta be Russian, because English is obviously not his native language... and he's too stupid to be Chinese. (lol... van goes racist by stereotyping a compliment to the Chinese culture.)
They could lose more than the 20 bux if you withdrew your 380 cash premium during the life of the option. So the stock goes to zero, you have 380, the broker is out 400. Not good for them, yeah? Seems logical they would lock up the strike value plus the premium so you don't stiff them.
Forget about all that. The screen cap shows he only got $3.60... apparently he thinks he's going to get the ask when selling at market.
Buying power requirement for selling a put in a cash or IRA account Selling an outright put requires the total cash-secured amount The buying power requirement for a cash-secured put is the (strike price) × (number of contracts) × (option multiplier). The premium received from the sale of the put can be applied to the initial requirement.
Exactly. Could you imagine... a $5K Robinhood account and someone sells a June CMG $2000 put for $1720 CMG goes to zero... and Robinhood is out $198,280 Yeah. Their risk-management dept just figured this out today and "silently changed conditions".
Man, this is impossible in such a CashAcct b/c when the order gets placed then the Cash immediately gets locked, so one does not have any access to it anymore for the duration of that trade... BS, you talk
This is my interpretation: analog to MarginAcct where there exist 2 MarginRequirements (InitialMarginReq and MaintMarginReq), they seem to have it similar with CashAcct, though neither their support nor their web site knows about it; only the system internally knows it: 1) InitialCashRequirement = Strike (ie. when placing the order) 2) MaintenanceCashRequirement = Strike minus FillPremium (ie. after order gets filled) Only that way does it all make a sense.
It still is. That is the cash required from you. IN ADDITION TO THE PREMIUM WHICH THEY HAVE ALREADY LOCKED UP AND YOU CAN'T TOUCH. LIKE THEY HAVE ALWAYS DONE. IT SURE IS. PREMIUM + (STRIKE MINUS PREMIUM) --- EQUALS STRIKE OR MATH FOR THE 5YO'S: A=PREMIUM B=STRIKE A + (B -A) = B THAT'S TRUE--- AS IT APPLIES TO YOU BUT THE PREMIUM BELONGS TO THE BROKER UNTIL YOU CLOSE THE TRADE. AS DOES ANY ADDITIONAL MONIES THAT MUST BE ADDED TO ADD UP TO THE STRIKE PRICE.