Chapter 04 · Section 4.1

Combined Positions

Which of the following combined positions entail no margin requirement at all?

a) A customer who is short 1 IBM Sept 150 put and who is long 100 IBM shares deposited in his safekeeping account.
No. That would help if the customer were short a call. The put potentially obliges him to buy more of the security (even if it is worthless.)
b) A customer who is short 1 IBM Sept 150 put and who has 5 IBM shares deposited in his safekeeping account.
c) A customer who is short 5 IBM Sept 150 puts and who is also short 500 IBM shares, to be delivered in October.
d) None of the above.