PureBytes Links
Trading Reference Links
|
NO CBOE Margin requirement. On a vertical the requirement is to pay the debit
and there is no debit. Your brokerage firm may margin it anyway....logic
would be protection if you lifted the long leg. Some firms margin verticals
as totally uncovered just for that reason.
Wayne Moody wrote:
> If you leg into a vertical spread that must be profitable at expiration
> regardless of the underlying, does the CBOE require margin to maintain it?
>
> Example: Buy OEX Jan 610 Call @ 8 1/2
> OEX moves up 7 points
> Sell OEX Jan 615 Call @ 9 1/2
>
> If held to expiration you will profit (before comm) between 1 and 6 and
> it cannot lose. Can you move on to new trades with full buying power?
>
> If not, what's the logic of the margin requirement?
>
> W.M.
|