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Strategies & Market Trends : Options

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To: taxman who wrote (538)1/3/2000 9:29:00 AM
From: Wyätt Gwyön  Read Replies (1) of 8096
 
You can definitely use the ITM equity you have as exercise equity. Margin requirement is not 50% of strike; it is 50% of entire position. Equity requirement can be met by a combo of ITM equity and cash if needed. So again, in the case of underlying at 200 and strike at 100, you already have 50% equity so don't need cash in hand. I think you might be getting confused by thinking of the strike as the critical issue; it is not the strike, but rather the entire value of the position.
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