Options Collateral

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Depending on the options strategy you use, we may hold stocks or cash as collateral to make sure you can cover the position in the case of assignment.

 

Collateral Held in Stock

  • Selling to Open a Covered Call
    • You’ll need to have 100 shares per contract of the underlying stock in your portfolio to cover the position. As long as the position is open, you won’t be able to sell 100 shares of the underlying stock. 

Collateral Held in Cash

  • Selling to Open a Cash-Covered Put
    • We’ll set aside enough money from your portfolio to buy the underlying stock at the contract’s strike price.
  • Opening a Credit Spread
    • We’ll put aside enough cash from your account to cover your maximum loss.

You’ll be able to see exactly what collateral we hold on the Detail page of the underlying stock.

Keep In Mind

We won’t use Gold Buying Power as collateral. We must hold cash.

Pending Orders

When you place an options order, we’ll hold the appropriate collateral (cash or stock) beginning at the pending state. The same way we hold enough cash to fill your pending order when you open an equity position, we’ll hold enough cash or stocks to cover your option position until the order is canceled.

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