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Collar trading options on margin

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collar trading options on margin

The option margin is the cash margin securities an investor must deposit in his account as collateral before writing options. Margin requirements vary by option options. Margin requirements are established by the Federal Reserve Board in Regulation T; individual brokers may impose additional requirements. Brokers require investors to deposit margin funds collar they may be needed to buy or sell underlying stocks if the options are exercised. They may also be needed to close losing positions. Margin requirements for options options are different from margin requirements for trading stocks or futures. Also, some options trading strategies have no margin requirement. This is because the margin stock can collar used as collateral. Neither covered calls nor covered puts have a margin requirement, for example. Dictionary Term Of The Day. A trading measure used to evaluate the efficiency of an investment or to compare Sophisticated content for financial advisors around investment strategies, industry trends, and advisor education. What is the 'Option Margin' The option margin is the cash or securities an investor must deposit in his account as margin before writing options. Initial Margin Minimum Margin Maintenance Margin Federal Call Buying On Margin Margin Call Excess Margin Deposit Margin Account Marginable. Content Library Articles Terms Videos Guides Slideshows FAQs Calculators Chart Advisor Options Analysis Stock Simulator FXtrader Exam Prep Quizzer Net Worth Calculator. Work With Investopedia About Us Advertise With Us Write For Trading Contact Us Careers. Get Free Newsletters Trading. All Rights Collar Terms Of Use Privacy Policy. collar trading options on margin

3 thoughts on “Collar trading options on margin”

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