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I see that now we are even closer to an agreement. I completely understand your explanation and it is clearly your personal preference but not a feature of the margin requirements of your broker. In other worse is an arbitrary "margin" that you build in case of major disaster and I am fine with...

I see that we are reaching some form of agreement here. Just for reference this is what you actually said: The give an take a few dollars is of vital importance here, as with the Facebook example I provided early we were talking about 38% of our capital still intact. And in many of the later...

Hello Put_Master, disagreeing with me is fine, but there are certain facts that can't be argued against. I'll explain. According to your logic, every single ITM vertical spread of any stock and any expiration month should be at its max value. That is, you are claiming that the value of any...

Hello Put_Master, I'm just trying to solve your confusion with this subject, nothing else. I think I see where is the difference between your thinking and mine. You seem to be thinking in terms of expiration day while my example was done on July 31, the day that the black swan occurred...

They either didn't understand your question or you were misinformed. Just take a look at: http://www.schwab.com/public/file/P-4193744/Margin_Handbook_FINAL_080112.pdf The requirements are right there for you to read and understand. I can't do more for you. Also as I showed you with a...

Hello Put_Master, even when both strikes of a credit spread are ITM the loss is not necessarily total as I just showed you in my example with Facebook. From basic options 101, the value of an option can be divided in two components: option value = intrinsic value + extrinsic value When...

Hello Put_Master, the math for the vertical spread is simple arithmetic. The spread needs $2 of margin per contract and you are selling them at $0.45, so from your own money you only need $1.55. Therefore: 100000/(1.55*100)=645.16 I just rounded to 645 :) I hope that that is clear now. You...

I really think that Put_Master is genuinely confused on this particular subject. That is why I'm making the effort to explain it in detail for him.

Thanks again for your response Put_Master. The answer to your question is: indeed you are mistaken. Remember that this whole discussion centers around writing puts in a Reg T. (margin) account. We agree that cash secured puts are relatively safe. Perhaps that is where you are confused. In...

I know the thread is 7 years old and this comment was posted about 1 month ago, but just for reference and to stop this line of attack, the official close of Google at 4:00PM that exp day was 280.30. No after hours funny games were involved at all.

Thank you for your reply Put_master, it is good to have numbers so we can put this argument to rest once and for all. My answer to your question is that I would rather be on the credit spread. I'll explain a couple points first: 1. The only way that the credit spread will have 100% loses...

I know this is a dead horse but I could not resist commenting on it. It seems Put_Master considers a naked put superior to a put credit spread in terms of risk. The only time when this is true in the face of just cold facts (without making any assumptions about the nature of the...