In a traditional stock trade, Regulation T typically allows you to borrow up to 50% of the purchase price. Options differ significantly:
While you often can't use margin to buy the options, you can sometimes use the value of your options as collateral to increase your overall account's Buying Power . The "Two Sides" of Margin Requirements buying options on margin
If the value of your account equity falls below the Maintenance Margin , your broker will issue a margin call, requiring you to deposit more cash or liquidate positions immediately. In a traditional stock trade, Regulation T typically
Options with 9 months or less until expiration cannot be purchased on margin. You must pay 100% of the premium upfront. In a traditional stock trade