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Canadian Stock and Index Options   

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FINRA and the NYSE have imposed rules to limit small investor (accounts with less than $25,000 in net equity) day trading. Clients that qualify as Pattern Day Traders are subject to Day Trading Restrictions for US Securities.

Please note that Place Trade utilizes option margin optimization software to try to create the minimum margin requirement. However, due to the system requirements required to determine the optimal solution, we cannot always guarantee the optimal combination in all cases.

 

The following table shows option margin requirements for each type of margin combination:

 

Combination Type

Margin Accounts

Cash Accounts

PT initial/Reg T End of Day

PT Maintenance

Long Call or Put

None. Long option cost is subtracted from cash.

None.

None. Long option cost is subtracted from cash.

Short Naked Call

Stock Options[1]
Call Price + Maximum (((30% * Underlying Price) - Out of the Money Amount), 10% * Underlying Price)
Index Options[1]
Call Price + Maximum (((15% * Underlying Price) - Out of the Money Amount), 10% * Underlying Price)

Same as Initial.

N/A

Short Naked Put

Stock Options[1]
Put Price + Maximum (((30% * (Underlying Price) - Out of the Money Amount), 10% * Strike Price)
Index Options[1]
Put Price + Maximum (((15% * (Underlying Price) - Out of the Money Amount), 10% * Strike Price)

Same as Initial

Aggregate Put Strike Price.

Covered Calls and Puts

Short an option with an equity position held to cover full exercise upon assignment of the option contract.

Stock Initial Margin Requirement + In the Money Amount

Initial Stock Margin Requirement + In the Money Amount

Covered Calls
Stock paid in full

Covered Puts
N/A

Call Spread

A long and short position of equal number of calls on the same underlying (and same multiplier) if the long position expires on or after the short position.

Maximum ((Strike Long Call - Strike Short Call), 0)

Same as Initial

Same as Initial if both options are European-style cash-settled

Otherwise, N/A.

Put Spread

A long and short position of equal number of puts on the same underlying (and same multiplier) if the long position expires on or after the short position.

Maximum (Short Put Strike - Long Put Strike, 0))

Same as Initial

Same as Margin Account

Both options must be European style cash settled.

Collar

Long put and long underlying with short call. Put and call must have same expiration date, same underlying (and same multiplier), and put exercise price must be lower than call exercise price.

Initial Stock Margin Requirement + In the Money Call Amount

 

In the Money Call Amount + Minimum (((10% * Put Strike Price) + Out of the Money Put Amount), (30% * Strike Call))

N/A

Long Butterfly

Two short options of the same series (class, multiplier, strike price, expiration) offset by one long option of the same type (put or call) with a higher strike price and one long option of the same type with a lower strike price. All component options must have the same expiration, same underlying, and intervals between exercise prices must be equal.

None

Same as Initial

None

Both options must be European-style cash-settled.

Conversion

Long put and long underlying with short call. Put and call must have the same expiration date, underlying (multiplier), and exercise price.

Initial Stock Margin Requirement + In the Money Call Amount

In the Money Call Amount + (10% * Strike Price)

N/A

Reverse Conversion

Long call and short underlying with short put. Put and call must have same expiration date, underlying (multiplier), and exercise price.

In the Money Put Amount + Initial Stock Margin Requirement

In the Money Put Amount + (10% * Strike Price)

N/A

Protective Put

Long Put and Long Underlying.

Initial Stock Margin Requirement

Minimum (((10% * Put Strike Price) + Put Out of the Money Amount), Long Stock Maintenance Requirement

N/A

Protective Call

Long Call and Short Underlying.

If Trading Currency is CAD
Minimum(Strike Long Call, Initial Stock Margin Requirement)
If Trading Currency is not CAD
Call Price + (30% * Underlying Price) + Minimum(Out of the Money Amount, (30% * Underlying Price))

If Trading Currency is CAD
Minimum(Strike Long Call, Maintenance Stock Margin Requirement)
If Trading Currency is not CAD
Call Price + (30% * Underlying Price) + Minimum(Out of the Money Amount, (30% * Underlying Price))

  

 

Notes for Canadian Stock & Index Options

 

Another way to look at the same information:

 

Long Put or Call

 

Reg T Margin
  Initial Margin None. Long option cost is subtracted from cash.
  Maintenance Margin

None.

 
Cash or IRA-Cash

None. Long option cost is subtracted from cash.

 

Short Naked Call

 

Reg T Margin
  Initial Margin Stock Options 1
Call Price + Maximum (((30% * Underlying Price) - Out of the Money Amount),
10% * Underlying Price) 

Index Options 1
Call Price + Maximum (((15% * Underlying Price) - Out of the Money Amount),
10% * Underlying Price)
  Maintenance Margin

Same as Initial.

 
Cash or IRA-Cash

N/A

 

Shot Naked Put

 

Reg T Margin
  Initial Margin Stock Options 1
Put Price + Maximum (((30% * (Underlying Price) - Out of the Money Amount), 
10% * Strike Price) 

Index Options 1
Put Price + Maximum (((15% * (Underlying Price) - Out of the Money Amount), 
10% * Strike Price)
  Maintenance Margin

Same as Initial.

 
Cash or IRA-Cash

Aggregate Put Strike Price.

 

Covered Calls and Puts

 

Reg T Margin
  Initial Margin Stock Initial Margin Requirement + In the Money Amount
  Maintenance Margin

Same as Initial.

 
Cash or IRA-Cash

Covered Calls
Stock paid in full

Covered Puts
N/A

 

Call Spread

 

Reg T Margin
  Initial Margin Maximum ((Strike Long Call - Strike Short Call), 0)
  Maintenance Margin

Same as Initial.

 
Cash or IRA-Cash

Same as Initial if both options are European-style cash-settled 

Otherwise, N/A.

 

Put Spread

 

Reg T Margin
  Initial Margin Maximum (Short Put Strike - Long Put Strike, 0))
  Maintenance Margin

Same as Initial.

 
Cash or IRA-Cash

Same as Margin Account

Both options must be European style cash settled.

 

Protective Put

 

Reg T Margin
  Initial Margin Maximum (Short Put Strike - Long Put Strike, 0))
  Maintenance Margin

Same as Initial.

 
Cash or IRA-Cash

Same as Margin Account

Both options must be European style cash settled.

 

Protective Call

 

Reg T Margin
  Initial Margin If Trading Currency is CAD
Minimum(Strike Long Call, Initial Stock Margin Requirement) 

If Trading Currency is not CAD
Call Price + (30% * Underlying Price) + Minimum (Out of the Money Amount, 
(30% * Underlying Price))
  Maintenance Margin

If Trading Currency is CAD
Minimum(Strike Long Call, Maintenance Stock Margin Requirement)

If Trading Currency is not CAD
Call Price + (30% * Underlying Price) + Minimum (Out of the Money Amount, 
(30% * Underlying Price))

 
Cash or IRA-Cash

N/A

 

Collar

 

Reg T Margin
  Initial Margin Initial Stock Margin Requirement + In the Money Call Amount
  Maintenance Margin

In the Money Call Amount + Minimum (((10% * Put Strike Price) + Out of the Money Put Amount), (30% * Strike Call))

 
Cash or IRA-Cash

N/A

 

Conversion

 

Reg T Margin
  Initial Margin Initial Stock Margin Requirement + In the Money Call Amount
  Maintenance Margin

In the Money Call Amount + (10% * Strike Price)

 
Cash or IRA-Cash

N/A

 

Reverse Conversion

 

Reg T Margin
  Initial Margin In the Money Put Amount + Initial Stock Margin Requirement
  Maintenance Margin

In the Money Put Amount + (10% * Strike Price)

 
Cash or IRA-Cash

N/A

 

Long Butterfly

 

Reg T Margin
  Initial Margin None.
  Maintenance Margin

Same as Initial.

 
Cash or IRA-Cash

None

Both options must be European-style cash-settled.

 

 

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