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Strategies & Market Trends : Option GEMS - Hot Options in Booming Companies...
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To: Glenn D. Rudolph who wrote (100)7/27/1997 7:14:00 PM
From: AlienTech   of 396
 
>>The SEC rules permit 400% of your equity as buy power. However, many firms are more strict than the SEC. PBS requires 50% of the value of the underlying security to maintain a naked put or call option. PNC brokerage only requires 20%. PNC also does not classify one as a daytrader as far as I know.<<

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..
Calls I can understand since the price can go pretty high so you need to cover that margin.
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