when you sell a PUT and cash collateral is required, the broker does not pay any interest on the cash collateral, only on free cash
thanks for the detailed response, Tom. i need some help in figuring out free cash.
let's say i have 10,000 cash + 10,000 in stock (margin acct).
i short 1 put for +1,000 with maintenance margin of ~ 3,000.
total balance becomes 11,000 (after settlement).
how much will be free cash? 8,000, 10,000, or 11,000?
i guess my question is if I have stock + cash, couldn't the collateral come from the stock?
appreciate your help.
Tim |
