Can I sell vertical spreads on margin?

[JCDST1979]

If I buy 10 stock of XYZ at $100 I only need $500, but Can I sell 10 $1 dollar wide vertical spread with $500?

 

[PoopyDeek]

No.

 

[OptionsOptionsOptions]

• You can't trade options on margin.
  
• The long options act as a cover for the short options.

 

[spindr0]

The margin requirement for a short vertical spread is the difference in strikes less the premium received.

 

[OptionsOptionsOptions]

The margin requirement for a short vertical spread is the difference in strikes less the premium received.

Not really margin - it would be cash in your account.

 

[spindr0]

Not really margin - it would be cash in your account.

What exactly do you think margin is? It's the SMA in your account from cash or marginable securities.

I suggest that you Google "Margin Requirement Credit Spread" and read about it. "Not really" is actually a really.

 

[spindr0]

• You can't trade options on margin.

Ummm, not really.

Per the CBOE: For purchases of puts or calls with more than 9 months until expiration, deposit / maintain 75% of the total cost / option current market value. When time to expiration reaches 9 months, the option no longer has value for margin purposes. Purchases of puts or calls with 9 months or less until expiration must be paid for in full.

 

[GuerrillaTrading]

If you have a margin account and your holding marginable securities, you can then use that buying power to trade options.

 

[ChrisDouthit]

The investment bank isn't going to let you go buck wild was options on margin as they will know they will be holding the bag when you run out of money.

 

[GuerrillaTrading]

yea, that's why I don't trade on margin, but it's nice to know it's there if you ever need it and I would never use more than half of the buying power.