How do you reduce cost of trade when selling options?

[bmoney]

Hello, new to options trading here. I've been scalping equities exceptionally well for awhile and have decided to give options a try on the side. I'm attempting to sell vertical put spreads OTM, but it soaks up such a significant amount of buying power. Is there a way to do this where I don't have to lock up so much capital for an extended period of time? I've allocated approx 40k to start options trading.

 

[ZBZB]

Have you got a portfolio margin account?

 

[bmoney]

I dont believe I do. I moved some money into an old TD ameritrade account since I am already familiar with the platform. How would this benefit me over a standard margin account?

 

[taowave]

Give an example of a spread and i could tell you what the cap it would be with PM

 

[bmoney]

Give an example of a spread and i could tell you what the cap it would be with PM

Try the SPX 15 JAN 21 put spread selling the 3500 and buying the 3450. for me it shows 4700 worth of buying power per contract

 

[taowave]

Assuming a 3 dollar sale,its showing $4536...

From my experience,PM lets you sell far more naked wings as opposed to Reg T..

Not sure it helps that much with spreads relatively close to the money

 

[Same Lazy Element]

From my experience,PM lets you sell far more naked wings as opposed to Reg T..

From that perspective (though I don't engage there):
SPAN > PM > Reg T

 

[bmoney]

From that perspective (though I don't engage there):
SPAN > PM > Reg T

I’d be interested to see how a SPAN acct would compare. I was unaware until now of the different margin accounts that could be done with derivatives in mind

 

[taowave]

I can get all the blow out risk I need with PM

From that perspective (though I don't engage there):
SPAN > PM > Reg T

 

[Same Lazy Element]

I can get all the blow

You could have stopped there for a better result