Vertical Bull Put Spread Margin

Discussion in 'Options' started by carbtrader, Jan 4, 2011.

  1. spindr0

    spindr0

    What's the REG T margin amount for buying (or shorting) shares in a margin account?
    Kinda like when your naked options are exercised and you are assigned a position.
     
    #11     Jan 6, 2011
  2. stoic

    stoic

    The Reg T margin is 50%
    All transactions are a charge or release to SMA (Reg T) and maintenance.

    However the buying power on the account is calculated on which component is driving the account "SMA" or "Maintenance Excess" , or the component that calculates the lowest amount of Buying Power. If the Maintenance Excess is the driver then SMA is said to be Inflated. If one was to look at a number of accounts, and I have looked at 100's of thousands and one sees inflated SMA the account has either been around a long time or the customer has lost money. SMA will get inflated over time, particularly in accounts that sell options. The sell is a release to SMA and if the option expires worthless there is no charge to SMA from the purchase. One should allways know which component is the Driver on one's account.
     
    #12     Jan 7, 2011
  3. spindr0

    spindr0

    Congrats at looking at 100's of thousands of accounts but what does any of that have do do with the OP's concern of having a short put option exercised early, forcing him to buy the stock and having a higher margin requirement to support that purchase?
     
    #13     Jan 7, 2011
  4. stoic

    stoic

    Nothing. You Asked. I answered.
     
    #14     Jan 7, 2011
  5. spindr0

    spindr0

    Actually, I didn't ask. I just stated that option margin is approx 20% versus equity margin of 50%. Somehow that turned into an explanation of how to build a watch... and I wasn't even asking what time it is. :)
     
    #15     Jan 8, 2011