How to Check the Margin Required for Options Strategies?
Moomoo SG offers reduced margin requirements for options strategies including spread, straddle, wide strangle, butterfly, condor, iron butterfly, and iron condor.
As of Sep 2022, The greatest margin reduced can be as much as 100%.
How to check the margin required for options strategies
Tap the "$" icon next to the "Sell" button on the option order page to view the change caused by the initial margin.
This amount shows the impact on the account's margin when the order is executed. The margin reduction rules will automatically apply to the new position when combinations are constructed.
Margin Reduction Example
Use a vertical spread strategy involving Ford shares as an example.
When you buy a put with a strike price of $16 that expires on Sep 16th, the margin required is $57 (which is the premium for that option).
When you sell a put with a strike price of $15 that expires on Sep 16th, the margin required is US$512.24.
Without the reduced margin requirement, the total margin charged for the two trades will be:
57+512.24=569.24.
With the reduced margin requirement, when you buy a put with a strike price of $16 that expires on Sep 16th, the margin required will still be $57.
When you sell a put with a strike price of $15 that expires on Sep 16th, the margin required will be $0.
The margin required for the put can be excluded for $512.24.
The margin required for the straddle, wide straddle, and covered call strategies can be viewed via the same path above.
This presentation is for informational and educational use only and is not a recommendation or endorsement of any particular investment or investment strategy. Investment information provided in this content is general in nature, strictly for illustrative purposes, and may not be appropriate for all investors. Read more
