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To: Tommaso who wrote (763)	8/7/2003 1:56:55 PM
From: Allen Furlan	Respond to of 793

Tommaso, re margin. Putting up collateral to support short option requirements does not entail paying interest on borrowed funds. For example, if you buy a $100,000 treasury you can use 90% or 90,000 to support short requirements and those requirements can decline(or increase) over time. For example my amr 05/25 calls required 1.85(sale price of call) plus 1.10(10% of stock price at time of sale) or 2.95 per option. Of course 1.85 was already received as proceeds of the sale. The position 6 weeks later requires 1.05 plus .90 which is slightly more than the original proceeds. If the market runs against your positions things get dicey when you must post more collateral but in any case you are not paying interest on borrowed funds. But you can be conservative by making sure your collateral/requirements ratio is as high as your tolerance requires.