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for equity options, the margin requirements are as follows:
Margin:
Purchases of puts or calls with 9 months or less until expiration must be paid for in full.
Writers of uncovered puts or calls must deposit / maintain 100% of the option proceeds* plus 20%
of the aggregate contract value (current equity price x $100) minus the amount by which the option
is out-of-the-money, if any, subject to a minimum for calls of option proceeds* plus 10% of the
aggregate contract value and a minimum for puts of option proceeds* plus 10% of the aggregate
exercise price amount. (*For calculating maintenance margin, use option current market value
instead of option proceeds.) Additional margin may be required pursuant to Exchange Rule 12.10.
you can read about them at the cboe website: http://www.cboe.com/OptProd/EquityOptions.asp
--- John Cappello <jvc689@xxxxxxx> wrote:
> Dear Slawek,
>
> I do not know the answer for sure re. margin. What I have is a good
> deal from Saloman Smith Barney which permits me all of the trades I
> want for a flat fee at $282 per quarter. I have talked to their top
> option people and they can not give me a clear picture of the amount
> of margin needed per uncovered margin premium collected. At the end
> of each day I make a trade they credit my account with the premium.
>
> I currently have on board 12 uncovered options and 2 covered options.
> Technically my available margin should be $100,000 at this point
> assuming no options were on board in the particular account I am
> using.
>
> They have never told me I had a margin problem and the underlying
> stocks range from $15 to in the $50's and I am doing 10 options of
> each.
>
> Obviously I have an exit stategy if I do not see them expiring
> worthless, however if one were to calculate the total price of all
> the stocks if executed it would come to over $200,000. So I do not
> believe they calculate margin on that basis...and if their top people
> are not clear on the subject...I will continue until they give me
> feedback.
>
> Sincerely,
>
> John
>
>
>
> ------------------ Reply Separator --------------------
> Originally From: "BobR" <bobrabcd@xxxxxxxxxxxxx>
> Subject: Re: [RT] John Cappello uncovered Puts
> Date: 01/05/2003 10:47am
>
>
> Do you mean Mark Clemons of Premium Research Group?
> ----- Original Message -----
> From: SLAWEKP@xxxxxxx
> To: REALTRADERS@xxxxxxxxxxxxxxx
> Sent: Sunday, January 05, 2003 9:55 AM
> Subject: [RT] John Cappello uncovered Puts
>
>
> John,
>
> Could You give monthly % return on margin required to support
> those
> uncovered puts.
> Back in 1994 I was selling credit spread 3 months out on both puts
> & calls on
> OEX trying to get 2.5 points or better on 5 point spreads between
> strikes so
> my risk was 5 - 2.5(credit) =2.5(risk) or less.
>
> I learn that from one pro Marc Clemonts out of Chicago back in
> 1994. Market
> was range bound but he was getting constant $10.000 to $15.000 a
> month on
> $100.000 margin just using 3 month options credit spreads
>
> Slawek
>
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