Thank you very much! Your explaination was really clear.
I'd assume that if I were to long a near month call and short a far month call, the margin required will be as if I'm selling naked for the far month right? The near month long call doesn't make any difference to the margin requirements.
This is what my broker posted... I have no idea what it means. Can someone dissect this for me? Thanks.
100% * option market value + maximum (((20% * underlying market value) - out of the money amount), 10% * underlying market value, $250 * number of contracts). 20% above is 15% for broad...
Buy 40 May CALL at 0.50
Sell 40 June CALL at 0.75
Total credit = 0.25
May I know how much margin would I need to maintain if I were to enter the above trade?
Thanks
Takeshi