|
PureBytes Links
Trading Reference Links
|
Hi delta883434,
I hope that's not your real name, you sound like a
Borg {;-)
The exchange minimum requirements are available at
<A
href="http://www.cboe.com/institutional/margin.asp#overview";>http://www.cboe.com/institutional/margin.asp#overview
however your broker can have additional requirements.
I believe QQQ's (now I sound like a Star Trek Gen.
II episode) are considered equities and have the same margin requirements,
which are calculated as follows:
100% of option proceeds plus 20% of underlying security/index value less
out-of-the-money amount, if any, to a minimum of option proceeds plus 10% of
underlying security/index value for calls; 10% of the put exercise price for
puts.
100% of your proceeds = $140 + 20% of
index = $671.80 (33.59 x .2 x 100). Thus the exchange minimum is
$140 + 671.80 = $811.80 Your broker is adding about 20%to that amount
to CHOA, after all HE is responsible to the clearing house for your
trades.
Remember all naked options are marked to market
every trading day and you naked positions must be fully margined as long as you
hold the short option. A short-term rally WILL effect your margin so have
sufficient cash on hand, just in case. Lets say the QQQ's go to 35. and
the puts are at 2.50. Now the margin is calculated on the higher stock
value and the puts are further in the money. $250 + (20% x 3500) = $950.00
+ the 20% your broker adds = $1140.00. If the QQQ's go even higher the
amount will accelerate upward. The moral is have lots of cash or be
prepared to cut losses very quickly.
I know a man who made 1.5 mil. selling puts in
internet stocks and lost 2.2 mil. doing the same thing.
Good luck and good trading,
Ray Raffurty
----- Original Message -----
<BLOCKQUOTE
style="PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px">
<DIV
style="BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: black">From:
<A title=delta88343@xxxxxxx
href="mailto:delta88343@xxxxxxx";>delta88343@xxxxxxx
To: <A title=realtraders@xxxxxxxxxxxxxxx
href="mailto:realtraders@xxxxxxxxxxxxxxx";>realtraders@xxxxxxxxxxxxxxx
Sent: Monday, April 22, 2002 7:39
PM
Subject: [RT] QQQ Options
Today I
investigated the option prices of May & June 34 puts on the Q's.
To sell a put, the premium collected would be $140 per contract with a
margin requirement of approx. $1000. The 34 June puts would be $190 premium
collected with about the same margin. Is this correct? It appears to
be with about a 35% margin requirement. I've sold calls numerous times
on an underlying future....but never a stock/index instrument. Is
there a more profitable approach. Thanks in advance. To
unsubscribe from this group, send an email
to:realtraders-unsubscribe@xxxxxxxxxxxxxxxYour
use of Yahoo! Groups is subject to the <A
href="http://docs.yahoo.com/info/terms/";>Yahoo! Terms of Service.
Yahoo! Groups Sponsor
ADVERTISEMENT
To unsubscribe from this group, send an email to:
realtraders-unsubscribe@xxxxxxxxxxxxxxx
Your use of Yahoo! Groups is subject to the Yahoo! Terms of Service.
|