Future's Options Margin q

R

RichardRimes

I went long a futures option and noticed that there was a margin requirement. Is there any way you can lose more than what your cost is for a LONG option contract? You can't on equity or regular index products so what makes a futures option different ?
 
Quote from RichardRimes:

I went long a futures option and noticed that there was a margin requirement. Is there any way you can lose more than what your cost is for a LONG option contract? You can't on equity or regular index products so what makes a futures option different ?
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No difference, you can't lose more than you paid for a long futures option either. I would be puzzled too. Call your firm and ask them what's going on.
 
Quote from RichardRimes:

I went long a futures option and noticed that there was a margin requirement. Is there any way you can lose more than what your cost is for a LONG option contract? You can't on equity or regular index products so what makes a futures option different ?
More...


futures options , huh ?
 
Quote from RichardRimes:

thanks dmo...and btw have appreciated your contribution/remarks and sharing your knowledge here on ET :)
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My pleasure - glad to hear it's helpful.
 
Quote from blackjack007:

as long as the margin req is less than the cost of the option, they are adhering to span and that's what i'd expect.
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thats what I was wondering...if it had to do with span...thx
 
One of rules of SPAN is your margin on long option positins cannot exceed value of your options. It works only if you have ONLY long options in your combined commodity. Any future or short option position will break this rule even if it is relatively small.
 
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