Naked Puts and Margin

D

dave2030

Newbie here, so forgive me if this is a dumb question as I haven't actually traded options yet.

I'm curious at what point you are typically charged interest for borrowing funds when shorting naked puts. Here's an example:
  • Stock XYZ is trading at 50, And a 49 strike Put expiring in 60 days with a price of 2, so by writing it I would get $200 in premium
  • If I wanted to make this fully cash secured I'd need an additional $4700 in cash above the premium, for $4900 total, if I understand everything correctly.
  • If I wanted to write this put naked, I would need $1350 in cash according to the margin requirements at OptionsHouse.
Now for my question - what happens if I have between $1350 and $4900 in my account? Am I charged interest on the amount less than the fully cash secured amount? Or, am I only charged interest if stock XYZ falls below the strike and I am assigned?
 
If your cash balance is positive, you're not borrowing money, so no.

While 4900 is the amount needed to purchase the stock, you haven't purchased it yet, so you couldn't be charged interest on money you haven't used yet, and the whole point of options is cheaper exposure. But, if assigned, you would be required to fork it up. But OptionsHouse doesn't want to be on the hook if you go catastrophically ITM, so there's a margin requirement as a compromise.

Some brokers, such as IB, have something called an "Exposure Fee" for high risk options accounts.
 
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