Question about margin requirement for this position

Discussion in 'Options' started by optiontrader123, Feb 25, 2020.

  1. Hello!

    I have a question about what margin that actually is required for below VXX position.
    I calculated it here and got this. I wonder if below is really true?
    http://www.cboe.com/trading-tools/calculators/margin-calculator

    Position:
    Long 1 Mar 17.5 call(s) at $1.74
    Short 100 VXX shares at $17.81

    Initial Margin
    Margin requirement for long call(s): $174.00
    Margin requirement on short sale of stock: $2,671.50
    Proceeds from short sale of stock: $1,781.00
    Margin call (SMA debit): $1,064.50


    Question 2:
    When they say margin call (SMA debit): $1,064.50
    What does that exactly mean. Does that mean as long as CASH + positions is worth MORE than $1,064.50, I will not have a margin call or do they only mean FREE cash?

    Thank you
     
  2. Bum

    Bum

    Buy the 17.5 put and save yourself the calculation mess. :)
     
  3. I know but I need to stick with my example and sort it out :)