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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study! -- Ignore unavailable to you. Want to Upgrade?

To: Douglas Webb who wrote (8591)	9/16/1998 2:12:00 PM
From: VincentTH	Read Replies (1) \| Respond to of 14162

OT OT ** OT Doug, I believe your equation for Percent Equity is susceptible (sp). PercentEquity = NetEquity/Margin Debit and must be < 30 ~ 35%depending on brokerage house. This is also called the maintenance requirement. StockBuyingPower (Reg T) = Net Equity - Margin Debit >= 0. This is called the initial margin requirement. You probably got a margin call because your Stock Buying Power dropped negative. I don't believe that Option Value comes into play when Percent Equity is calculated (to the effect that Options Values have been subtracted from Market Values to come up with Net Equity, and that your Net Equity has been adjusted by the amount of options that are In The Money). My 2 cents.