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