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INDEX OPTIONS:
LONG OPTION EXAMPLES
Long Options With More Than
9 Months to Expiration (Listed)
Long Options With More Than
9 Months to Expiration (OTC)
Long Options With 9 Months or
Less to Expiration (Listed or OTC)
Long 1 index Nov 430 put at 5-1/2
(Expiring in 6 months,
any style exercise)
Underlying index at 433.35
Margin Calculation: 5.50 x 100 = $550.00
Margin Requirement: $550.00
SMA Debit or Margin Call: $550.00
Explanation: Long options with 9 months or less to expiration must be paid for in full.
Long 1 index Jun 1325 call at 16-3/4
(Expiring in 20 months, can be either
American or European style exercise)
Underlying at 1290
Margin Calculation: 75% x 16.75 x 100 = $1,256.25
Margin Requirement: $1,256.25
SMA Debit or Margin Call: $1,256.25
Explanation: Initial (maintenance) margin requirement for long listed options with more than 9
months until expiration is 75% of the premium (market value). Option has no value for margin
purposes when time remaining to expiration reaches 9 months.
Long 1 Jun 665 call at 11
(expiring in 12 months, American style
exercise only, and must be guaranteed
by the carrying broker-dealer)
Underlying at 667.34
Margin Calculation: (75% x 2.34) + (11 - 2.34) x 100 = $1,041.50
Margin Requirement: $1,041.50
SMA Debit or Margin Call: $1,041.50
Explanation: For an OTC option with 9 months or more until expiration, the initial margin
requirement is 75% of the option’s intrinsic value (in-the-money amount) plus 100% of the
amount by which the option’s purchase price exceeds its intrinsic value. In addition to having
more than 9 months to expiration, OTC options must be American style exercise and be
guaranteed by the carrying broker-dealer in order to be eligible for margin. The maintenance
margin requirement is 75% of the option’s intrinsic value. Option has no value for margin
purposes when time remaining to expiration reaches 9 months.
Long 1 Jun 665 call at 13
(expiring in 12 months, American style
exercise only, and must be guaranteed
by the carrying broker-dealer)
Underlying at 663.50
Margin Calculation: (75% x 0) + (13 - 0) x 100= $1,300.00
Margin Requirement: $1,300.00
SMA Debit or Margin Call: $1,300.00
Explanation: For an OTC option with 9 months or more until expiration, the initial margin
requirement is 75% of the option’s intrinsic value (in-the-money amount) plus 100% of the
amount by which the option’s purchase price exceeds its intrinsic value. In addition to having
more than 9 months to expiration, OTC options must be American style exercise and be
guaranteed by the carrying broker-dealer in order to be eligible for margin. The maintenance
margin requirement is 75% of the option’s intrinsic value. Option has no value for margin
purposes when time remaining to expiration reaches 9 months. In this example the OTC option
is not in-the-money. OTC options that are at or out-of-the-money must be paid for in full.
CALCULATION, REQUIREMENT AND EXPLANATION