1. Initial Margin for Long Option accts.
Long Market
Value
Deposit 50%
4000
Deposit $2,000
2000
Deposit 100% Purchase Price

2. Long Position Margin
• 50% of Loan with cash
• 200% of loan with marginable securities

3. Initial Margin for Short Option accts.
Short Market
Value
Deposit 50%
4000
Deposit $2,000

4. Short Position Margin
• 50% of Loan with cash
• 100% of loan with marginable securities

5. Short Min Maint.
Equity Min. is
whichever is
greater
30% of SMV or $5.00/share
$5.00
100% of SMV
$2.50
$2.50/share

6. Spread Margin
• No requirement if it’s covered
• Otherwise 50%

7. Covered if Long
Call Spread
expires before or at
same time
March April
Expiration Expiration
Long Short
XYZ March 30 @ 6 XYZ April 40 @ 2

8. Covered if Short
Put Spread
expires before or at
same time
March April
Expiration Expiration
Short Long
XYZ March 30 @ 6 XYZ April 40 @ 2

9. Covered Spreads
• It’s covered if you will buy the stock before
you sell it. (same is okay)

10. Example
• Buy 3 XYZ Mar. 60 calls @ 7 and sell 4 XYZ Mar.
70 calls @ 10 what is your margin?

11. Index Options
• 100% of premium for long
• Writers always considered uncovered

12. Call Covered If
• Own stock
• Own convertibles into stock
• Own Long call w/ lower strike
• Stock is deposited at bank or Escrow

13. Put Covered If
Deposit cash = aggregate strike
Cash is deposited at bank
Long put with higher strike

14. Accrued Interest
1. Find 4. Subtract
2. Find Right 3. Count
Coupon Settlement
Start Date Number Days
Payment Date Date

15. Find Coupon Date
• Coupon Date = Maturity & 6 mo. After
$1,000 Par Value December 1, 2035 6%
Corporate
Coupons Paid
These Dates
Jun. 1
Dec. 1

16. Find Right Start Date
• Ex. Bond purchased on Apr. 15
$1,000 Par Value December 1, 2035 6%
Corporate
Previous Owner Gets Interest
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Purchase Date
Count from this date

17. Count Days
Add the number of days before settlement
=30+30+30+30+15+5 =140 Days
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
30 30 30
30
15 Days + 5 Days

18. Subtract Settlement
Subtract Settlement Date
140 – 1 = 139 Total Accrued Interest
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
30 30 30
30
15 Days + 5 Days

19. Calculating What You Owe
• 139 Days
• $60 Interest Payment
• $60/360days = $.16 day
• =$.16 * 139
• =$22.24