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SPY Naked Put Margin
- Thread starter asdfghj7
- Start date
Quote from asdfghj7:
I have two SPY naked puts. One is at 700 and the other is at 64. My margin requirement is only $1600. Shouldn't it be $13400 based worse case scenario for each option. $7000 for the 700P and $6400 for the 64 put ???
You must have an account large enough to qualify for 'portfolio margin' - and that's based on risk as measured by the broker's system.
If not, then, yes, the requirement should be 13,400 less the cash you collected.
Mark
If the two SPY puts were sold today the opening margin requirements would be approx. $1,375.Quote from asdfghj7:
I have two SPY naked puts. One is at 700 and the other is at 64. My margin requirement is only $1600. Shouldn't it be $13400 based worse case scenario for each option. $7000 for the 700P and $6400 for the 64 put ???
"The requirement is equal to 20% of the current stock price plus the put premium minus any out-of-the-money amount."
Options as a Strategic Investment [McMillan] (pg. 274)
Worse case as stated (plus 2 Tylenol)
Quote from dagnyt:
You must have an account large enough to qualify for 'portfolio margin' - and that's based on risk as measured by the broker's system.
If not, then, yes, the requirement should be 13,400 less the cash you collected.
Mark
No, you don't have to have a PM. The margin on naked puts is what Nanook mentioned.
Quote from dagnyt:
You must have an account large enough to qualify for 'portfolio margin' - and that's based on risk as measured by the broker's system.
If not, then, yes, the requirement should be 13,400 less the cash you collected.
Mark
you said you've been trading options for 30 years and you got this wrong? this is options 101.
reg-t for selling naked puts or calls otm = 10% of aggregate value + premium.
(7000+6400) * 0.10 = 1340. you should know this in your head if you've traded options for even 1 year
Quote from blackjack007:
you said you've been trading options for 30 years and you got this wrong? this is options 101.
Not everyone uses a margin account with Reg T requirements.
For example, retirement accounts require the margin as I stated it.
I was incorrect in neglecting to mention that point in my original response.
Mark