Vertical Bull Put Spread Margin

[spindr0]

Quote from stoic:

Depends on what's driving the account, SMA or Maintenance.

What's the REG T margin amount for buying (or shorting) shares in a margin account?
Kinda like when your naked options are exercised and you are assigned a position.

 

[stoic]

Quote from spindr0:

What's the REG T margin amount for buying (or shorting) shares in a margin account?
Kinda like when your naked options are exercised and you are assigned a position.

The Reg T margin is 50%
All transactions are a charge or release to SMA (Reg T) and maintenance.

However the buying power on the account is calculated on which component is driving the account "SMA" or "Maintenance Excess" , or the component that calculates the lowest amount of Buying Power. If the Maintenance Excess is the driver then SMA is said to be Inflated. If one was to look at a number of accounts, and I have looked at 100's of thousands and one sees inflated SMA the account has either been around a long time or the customer has lost money. SMA will get inflated over time, particularly in accounts that sell options. The sell is a release to SMA and if the option expires worthless there is no charge to SMA from the purchase. One should allways know which component is the Driver on one's account.

 

[spindr0]

Quote from stoic:

The Reg T margin is 50%
All transactions are a charge or release to SMA (Reg T) and maintenance.

However the buying power on the account is calculated on which component is driving the account "SMA" or "Maintenance Excess" , or the component that calculates the lowest amount of Buying Power. If the Maintenance Excess is the driver then SMA is said to be Inflated. If one was to look at a number of accounts, and I have looked at 100's of thousands and one sees inflated SMA the account has either been around a long time or the customer has lost money. SMA will get inflated over time, particularly in accounts that sell options. The sell is a release to SMA and if the option expires worthless there is no charge to SMA from the purchase. One should allways know which component is the Driver on one's account.

Congrats at looking at 100's of thousands of accounts but what does any of that have do do with the OP's concern of having a short put option exercised early, forcing him to buy the stock and having a higher margin requirement to support that purchase?

 

[stoic]

Quote from spindr0:

Congrats at looking at 100's of thousands of accounts but what does any of that have do do with the OP's concern of having a short put option exercised early, forcing him to buy the stock and having a higher margin requirement to support that purchase?

Nothing. You Asked. I answered.

 

[spindr0]

Quote from stoic:

Nothing. You Asked. I answered.

Actually, I didn't ask. I just stated that option margin is approx 20% versus equity margin of 50%. Somehow that turned into an explanation of how to build a watch... and I wasn't even asking what time it is.