Collaterizing 'in the money' options

Discussion in 'Options' started by Denebola, Feb 16, 2016.

  1. Sig

    Sig

    You may not be able to collateralize but this logic isn't really sound. A deep itm option on a stock like IBM is far less likely to lose half its value over time x then an ordinary position in a stock like GPRO, for example.
     
    #11     Feb 18, 2016
  2. Maverick74

    Maverick74

    It has nothing to do with likelihoods. It has to do with securities lending. The process has to do with brokers earning an interest differential which they CAN'T do on an option.
     
    #12     Feb 18, 2016
    destriero likes this.
  3. Sig

    Sig

    I actually quoted the wrong person, the quote I was referring to was ""Your alleged ITM option position could easily be OTM the next day." I was pointing out the fallacy of that logic. Your explanation definitely makes more sense!
     
    #13     Feb 18, 2016
  4. i960

    i960

    Seems like even if you could do what the OP is asking it'd be a sketchy idea in the first place. Anyway how about FOPs and mark to market? Does that fit into this?
     
    #14     Feb 19, 2016
  5. destriero

    destriero


    Yeah, I mentioned it earlier. A large upside mark will reduce your req.
     
    #15     Feb 19, 2016
    i960 likes this.