Customer Option Margin

Discussion in 'Options' started by mike212, May 7, 2003.

  1. mike212


    I sold 75 of the 2.5 strike puts for 1.00. (XNP Jan 05) On the extremes I can either make up to 1.00 or lose 1.50.

    Charlie Schwab has tied up $37,500 of my margin for this trade. They say that they calculate the margin requirement by taking contracts * 100 * strike * 2.

    Is this normal? Do other brokerages calculate margin requirements on a short naked put the same way?

    The way I see it the most I can lose is 1.5 * 75 * 100 = $11,500. Therefore that is all I should have to put up as margin.

    Thanks in advance for the help.

  2. I just priced it at my broker. The required buying power is $7593.75 + premium received (assuming I sold @ 1.00). So, for me it would be $15,093.75 total.
  3. mike212


    What broker? If I'm going to continue to trade like this I'm going to need to change brokers.