sw_trader. There are no trick questions on this test. Go with simple responses. Do you mean by your reply that the correct answer is what he already answered - a. $3,176,000 It seems like the key here is "you establish" - meaning you already have the position and both are long. In traditional margin account accounts there is no margin on Long only options positions and they have to be paid for with 100% cash so there would be no margin requirement --correct? so the correct answer would then be e. None of the above. If the question was instead worded as: in a traditional margin account how much cash is required to establish the following positions: Long 1,000 OEX JUN 640 Calls @ $21.00 Long 1,000 OEX JUN 640 Puts @ $10.76 Then the correct answer would then be a. $3,176,000 1. You establish the following positions: Long 1,000 OEX JUN 640 Calls @ $21.00 Long 1,000 OEX JUN 640 Puts @ $10.76 What is the traditional margin requirement? a. $3,176,000 b. $1,588,000 c. $1,024,000 d. $317,600 e. None of the above
you have established the following positions: long 50 xyz jan 820 calls @3 long 50 xyz jan 675 puts @4 what is the traditional margin requirement? a. 50,000 b. 60,000 c. 35,000 d. 25,000 please help
I'm doing a similar test right now. I guess "traditional" margin is not portfolio margin. "Establish" is not "maintain", but the opposite. If the stated margin requirements for long options positions in traditional margin accounts are correct, then the margin requirement of the position is $3,176,000.
Normally traditional (ie. RegT) margin does not apply to long options positions. They should be careful when designing such test questions.
(50*3*100) + (50*4*100) = ?? Maybe a PMA is not for you yet. You need a deeper understanding of options.