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Strategies & Market Trends : Option GEMS - Hot Options in Booming Companies...
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To: AlienTech who wrote (105)7/27/1997 7:25:00 PM
From: Glenn D. Rudolph   of 396
 
Why would they need 50% to write a put? I would think they would need the money you got for the sale of the PUTS and 50% of the STRIKE price. Like what happens if you want to sell a put for a $80 stock , strike price of $20?, You need 40+1= 41 equity for a 20 strike, seems a little excessive to me.. Alien, That is excessive as you stated. I stopped doing options through them for that reason. I am just going to use them for day trading<G> Actually, your calculation for a Put as stated is correct. However, that is the initial requirment. The SEC will permit the brokerage house to only require 20% after you meet the intial call. The SEC rules on put requirements are changing effective September 1, 1997 and they will reflect the distance out of the money of a put which is not adjusted presently. Glenn
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