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US Stock & Index Options 

  Canadian Stock & Index Options Requirements 

 Non-US and Non-Canadian Options 

 

What are your margin requirements for options? 

Learn about Margin Requirements for every combination of US Options and save with our ultra-low margin rates and deep discount commissions at Place Trade. From naked puts & calls to butterflies & iron condors - we cover it all!

Place Trade utilizes option combination 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.

 

Please Note:  These formulas make use of the functions Maximum (x, y, ..), Minimum (x, y, ..) and If (x, y, z). The Maximum function returns the greatest value of all parameters separated by commas within the parenthesis. As an example, Maximum (500, 2000, 1500) would return the value 2000. The Minimum function returns the least value of all parameters separated by commas within the parenthesis  As an example, Minimum (500, 2000, 1500) would return the value of 500. The If function checks a condition and if true uses formula y and if false formula z. As an example If (20 < 0, 30, 60) would return the value 60.

  

Compare our rates vs. other national firms and see how much you could be saving!

 
 

Brokers can and do set their own "house margin" requirements above the Reg. T or statutory minimum. For option spreads in VIX securities, PT may charge an additional minimum house margin requirement of $150. For option positions that meet the definition of a "universal" spread under CBOE Rule 12.3(a)(5), PT may charge an additional house requirement of 102% of the net maximum market loss associated with the spread (i.e., net long option position price – net short option position price * 102%), if greater than the statutory requirement.


Combination Type


The following tables show current option margin requirements for each type of margin combination. Please click on a link below to learn more:

 

  Long Call or Put   Long Call and Put   Protective Put  
  Short Naked Call   Short Call and Put   Protective Call  
  Short Naked Put   Long Butterfly   Conversion  
  Covered Calls and Puts   Short Butterfly Put   Reverse Conversion  
  Call Spread   Short Butterfly Call   Iron Condor  
  Put Spread   Long Box Spread      
  Collar   Short Box Spread      


 

 
                                 

Margin Requirements for each type of Margin Combination:

 

Please note that the information and calculations below apply only to Reg T, Reg T Margin - IRA and Cash Accounts. Please see our Portfolio Margin page for US Options requirements in a Portfolio Margin account.

 

 

Margin Requirements for each type of Margin Combination

 

Combination Type

Margin Accounts

Cash Accounts

Reg T Margin - IRA

PT initial/Reg T End of Day

PT Maintenance

Long Call or Put

None

Same as Initial

Same as Initial

Same as Margin Account

Short Naked Call

Stock Options[1]
Call Price + Maximum((20%[2] * Underlying Price - Out of the Money Amount), (10% * Underlying Price))

 

Index Options[1]
Call Price + Maximum((15%[3] * Underlying Price - Out of the Money Amount), (10% * Underlying Price))

 

World Currency Options<sup>[1]
Call Price + Maximum((4%[2] * Underlying Price - Out of the Money Amount), (0.75% * Underlying Price))

 

Cash Basket Option[1]
In the Money Amount

Same as Initial

N/A

Same as Cash Account

Short Naked Put

Stock Options[1]
Put Price + Maximum((20%[2] * Underlying Price - Out of the Money Amount), (10% * Strike Price))

 

Index Options[1]
Put Price + Maximum((15%[3] * Underlying Price - Out of the Money Amount), (10% * Strike Price))

 

World Currency Options[1]
Put Price + Maximum((4%[2] * Underlying Price - Out of the Money Amount), (0.75% * Underlying Price))

 

Cash Basket Option[1]
In the Money Amount

Same as Initial

Put Strike Price

Same as Cash Account

Covered Calls and Puts

  

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

Initial Stock Margin Requirement + In the Money Amount[4]

Initial Stock Margin Requirement + In the Money Amount[4]

Covered Calls
Stock paid in full

Covered Puts
N/A

Covered Calls
None

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.

Same as Margin Account

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.

Same as Margin Account

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

Equity with Loan Value of Long Stock
Minimum (Current Market Value, Call Aggregate Exercise Price)

Minimum (((10% * Put Exercise Price) + Out of the-Money Put Amount), (25% * Call Exercise Price))

N/A

N/A

Long Call and Put

  

Buy a call and a put.

Margined as two long options.

Same as Initial

Same as Margin Account

Same as Margin Account

Short Call and Put

Short Call and PutShort Call and Put

Sell a call and a put

If Initial Margin Short Put > Initial Short Call,
then Initial Margin Short Put + Price Short Call

else

If Initial Margin Short Call >= Initial Short Put,
then Initial Margin Short Call + Price Short Put

Same as Initial

N/A

 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.

Same as Margin Account

Short Butterfly Put

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

((Highest Put Options Strike - Middle Put Options Strike) + (Middle Put Options Strike = Lowest Put Option Strike))

Same as Initial

N/A

N/A

Short Butterfly Call

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

((Highest Call Options Strike - Middle Call Options Strike) + (Middle Call Options Strike = Lowest Call Option Strike))

Must maintain initial margin.

N/A

N/A

Long Box Spread

Long call and short put with the same exercise price (“buy side”) coupled with a long put and short call with the same exercise price (“sell side”). Buy side exercise price is lower than the sell side exercise price. All component options must have the same expiration, and underlying (multiplier).

None

Same as Initial

N/A

Same as Margin Account

Short Box Spread

Long call and short put with the same exercise price ("buy side") coupled with a long put and short call with the same exercise price (“sell side”). Buy side exercise price is higher than the sell side exercise price. All component options must have the same expiration, and underlying (multiplier).

American Style
Maximum (((Long Call Price + Long Put Price - Short Call Price - Short Put Price) * -102%), (Long Call Strike - Short Call Strike)) 

European Style
Long Call Strike - Short Call Strike

Same as Initial

N/A

Same as Margin Account

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

Equity with Loan Value of Long Stock
Minimum (Current Market Value, Call Aggregate Exercise Price)

10% * Strike Price

N/A

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

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

N/A

Protective Call

Long Call and Short Underlying.

Initial Standard Stock Margin Requirement

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

N/A

N/A

Iron Condor

Sell a put, buy put, sell a call, buy a call.

Short Put Strike - Long Put Strike

Same as Initial

If all options are European and cash-settled, same as margin account.

Same as Margin Account

Sell a put, buy put, sell a call, buy a call.

Short Put Strike - Long Put Strike

Same as Initial

If all options are European and cash-settled, same as margin account.

Same as Margin Account

 

Special Notes:

 

Options with Commodity-Like Behavior

 
 
  • Specific options with commodity-like behavior, such as VIX Options, have special spread rules and consequently may be required to meet higher margin requirements than a straightforward US equity option.  
  • Clients are urged to use the paper trading account to simulate an options spread in order to check the current margin on such a spread.
 
  • If a combination of options is put on in such a way that a specific strategy is optimal at that point in time, the strategy may remain in place until the account is revalued even if it does not remain the optimal strategy.  A reevaluation will occur when there is a position change within that symbol.  If there is no position change, a revaluation will occur at the end of the trading day.
 
 

1 Minimum charge of USD 2.50 per share of underlying.  

What does this "Minimum Charge" mean? 

No, we do not charge you $2.50 per share. It refers to the price per share used in the calculation. If the value of your shares are below USD 2.50 you will need to substitute USD 2.50 for your current share price when calculating your minimum margin requirements.

For example; when you are calculating the minimum requirement of a stock trading at $1 per share, you would use a minimum of $2.50 per share in the calculation (as in 10% times $2.50) instead of $1.00 (10% times $1.00). Please remember to

Please note that this minimum does not apply for End of Day Reg T calculation purposes. 

 

 
 

Leverage Options 

 
 

2 For Leverage Options, Minimum (20% * Leverage Factor or 100%)

3 For Leverage Options, Minimum (15% * Leverage Factor or 100%)

 

 
  

Covered Basket Calls 

 

 

 

4 For Covered Basket Calls (short basket call, long component stocks), the margin requirement is for all the component stocks. 

 

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. 

 

What are margin requirements for option combinations, spreads, leverage & options with commodity-like behavior? Short, long, naked, collars, butterfly and more.

  #1d1d6f   #fbfbfb

 

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