I think the margin requirement is about $5,000 to sell the
puts. If the stock is put to you then you would need
$44,000. Also if it is a non-margin account like a 401K or
IRA then you would need the entire $44K there in cash to even sell
the put but for a cash margin account I don't think its so bad.
Nope I don't think that makes economic sense. And besides matt
was talking about SPY options which I thought all the ETFs settled
in cash.
In any case, almost no one exercises an option; it is almost
always more profitable to sell into the market due to the extra
time value and/or speculative value regardless how small. And in
the case of all 'out of the money' options, that is all there is:
time and spec value.
$5K to make $525, actually. The 5K was based on selling 5
contracts trading at $1.05 (obviously subtract commissions).
I used 5 contracts because I thought Matt used that as an example
but looking back I guess it was a senior moment. I did 5 in
one of my accounts.
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I think the margin requirement
Nov SPY Puts
Posted by tom on 23rd of Sep 2011 at 06:39 am
I think the margin requirement is about $5,000 to sell the puts. If the stock is put to you then you would need $44,000. Also if it is a non-margin account like a 401K or IRA then you would need the entire $44K there in cash to even sell the put but for a cash margin account I don't think its so bad.
$5k margin to make $100
Posted by perthx on 23rd of Sep 2011 at 10:01 am
Nope I don't think that makes economic sense. And besides matt was talking about SPY options which I thought all the ETFs settled in cash.
In any case, almost no one exercises an option; it is almost always more profitable to sell into the market due to the extra time value and/or speculative value regardless how small. And in the case of all 'out of the money' options, that is all there is: time and spec value.
$5K to make $525, actually.
Posted by tom on 23rd of Sep 2011 at 10:40 am
$5K to make $525, actually. The 5K was based on selling 5 contracts trading at $1.05 (obviously subtract commissions). I used 5 contracts because I thought Matt used that as an example but looking back I guess it was a senior moment. I did 5 in one of my accounts.