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.
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.
  No. Not entirely. True, there will not be a margin requirement for the option itself (because it is covered by the short stock position), but there is a margin requirement on the short stock position.
  d) None of the above.

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