Chapter 04 · Section 4.1

Margin Requirement- GM/Colgate Options

Tina's Position at the end of day 2           Closing Prices
hort 3 covered Colgate Nov35 calls $     0    Colgate Stock      $37.50
short 3 uncov. Colgate Nov 35 calls $ 3,330   Unisys Stock       $75.00
long  5 Unisys Nov 75 puts          $     0   Colgate Nov 35 Call $3.60
excess margin:             $ 2,820            Unisys Nov 75 Put   $1.75

TINA'S TRANSACTIONS ON DAY 3:  Sold 2 GM March 70 puts at $2.00

Tina's Position During Day 3        Margins          Current  Prices 

short 3 covered Colgate Nov35 calls $     0    Colgatetock          $39.00  
uncov. Colgate Nov35 calls          $ 3,330    Colgate Nov35 call   $ 5.00
long  5 Unisys Nov 75 puts          $     0                          
short 2 uncov. GM Mar 70 puts       $ 2,560 
excess margin:                      $ .....        

a) +3840
• b) -1280
  No. $1,280 is the new margin requirement for one uncovered Colgate 35 call. Tina is short 6 Colgate calls, 3 of them uncovered.
  c) -3330
  d) -7680
  e) 8500

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