Broker silently changed the conditions...

[zdreg]

"
Yes but the premium is only received AFTER the trade has settled. The cash requirement is BEFORE the trade happens. Before the trade happened, only the strike price is known so the broker needs to make sure that you have enough cash in the account to support the maximum possible risk on the put which is the entire strike price regardless of the premium. It's not an issue of broker requiring more; it's a matter of the broker covering its a$$.

If you enter a limit order to sell the broker knows with 100%certainty whether you have enough cash in the account. Premium received is cash like any other
cash in your account.
+It has been correctly pointed out by Van.. that the cash must be equal to the strike price in a cash account.

 

[zdreg]

How can that be correct because Tasty Trade allows you to apply the premium to the initial margin requirement -- strike minus premium -- so must be broker-dependent. Right?

Tasty trade is correct.

 

[zdreg]

Yes but the premium is only received AFTER the trade has settled

Selling the option and receiving premium is settled simultaneously.

 

[zdreg]

But the broker didn't. It required exactly the amount needed to cover its risk. You are now just trolling because you just don't want to admit that you are wrong even when people have pointed it out to you to your face. This is what you do in every single thread.

Thanks for the update.

 

[TheDawn]

How can that be correct because Tasty Trade allows you to apply the premium to the initial margin requirement -- strike minus premium -- so must be broker-dependent. Right?

If so, then the OP's example of strike: 4 and premium 3.80 would mean that, at Tasty Trade, he would, in fact, only need $20 in his cash account to execute that trade. Right?

So OP is complaining that TDA now requires (or always has required?) cash equal to the full strike to execute his trades. Seems to be a legit complaint, but since it's broker's prerogative, and since OP needs access to TDA's free API, he'll just have to deal with it.

Can you show where does TastyTrade show that it only requires strike - premium for cash-secured puts?

 

[zdreg]

Can you show where does TastyTrade show that it only requires strike - premium for cash-secured puts?

https://support.tastyworks.com/support/solutions/articles/43000435285-cash-secured-put#:~:text=The buying power requirement for,buying power requirement is different.
I never criticize people. I let people reveal themselves. Your post below is a prima facie example,

 

[TheDawn]

https://support.tastyworks.com/support/solutions/articles/43000435285-cash-secured-put#:~:text=The buying power requirement for,buying power requirement is different.

SELLING AN OUTRIGHT PUT REQUIRES THE TOTAL CASH-SECURED AMOUNT

The buying power requirement for a cash-secured put is the (strike price) × (number of contracts) × (option multiplier). The premium received from the sale of the put can be applied to the initial requirement.

EXAMPLE OF SELLING A CASH-SECURED PUT
Sell to open 6 Mar 11 puts at $0.75 = $0.75 x 6 qty x 100 = $450 credit received

6 x 11 x 100 = $6,600 cash-secured amount

When you are entering a trade, has the premium been received?? No. It states very clearly in the very first sentence: To sell the put it requires TOTAL CASH-SECURED AMOUNT which is NOT offset by any premiums. It's not our problem that OP can't read. If English is his second language, then he should take more ESL courses.

You need to learn to read as well to troll better.

 

[earth_imperator]

https://www.tradestation.com/pricing/options-margin-requirements/

 

[earth_imperator]

How can that be correct because Tasty Trade allows you to apply the premium to the initial margin requirement -- strike minus premium -- so must be broker-dependent. Right?

That's the question. Normally it should be the same with all brokers b/c the risk is clearly defined; there is not any risk for the brokers b/c of the cash collateral in full (creditrcvd + cash = strike, and with such a CashSecuredPut there is not any risk that is > strike).

If so, then the OP's example of strike: 4 and premium 3.80 would mean that, at Tasty Trade, he would, in fact, only need $20 in his cash account to execute that trade. Right?

Yes, also at TradeStation.

So OP is complaining that TDA now requires (or always has required?) cash equal to the full strike to execute his trades. Seems to be a legit complaint, but since it's broker's prerogative, and since OP needs access to TDA's free API, he'll just have to deal with it.

Something suddenly changed on Thursday b/c it did not let me open another such CashSecuredPut position, but which it did all the time in the past even up to some minutes ago in a previous trade. There was enough settled cash available which combined with the credit gives a value that is more than the strike.

 

[ETJ]

TD making a change would end up with more people griping. Possibility the OP is living under a release restriction which would have affected the account(s) and not applied firm-wide.