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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: Greg Higgins who wrote (10829)	5/18/1999 4:05:00 PM
From: VincentTH	Respond to of 14162

Greg wrote: Roman S. writes: is it logical to assume the brokerage would require that you have enough cash in your account to cover the purchase of the stock just in case it was 'put' to you? In a cash account, yes. In a margin account, the brokerage margin policy must be followed. Exchange minimum margin is 20% of stock price less the out of the money amount plus the premium. [ I think I said that right.] I believe that was the initial requirement for NP (20-35% of stock price + amount ITM - premium). At expiration time, or when the stock is put to the account, the assignment is considered a purchase, and thus subjected to the 50% margin requirement or Reg T. These 2 are again not to be confused with the NP maintenance requirement :-) //V