On Margin | Buying Options

Trading options on margin allows you to leverage your existing capital to control larger positions, but it operates under much stricter rules than traditional stock margin. While you can borrow money to buy certain long-term options, most standard option purchases must be paid for in full.

Collateral to ensure you can fulfill the obligation if assigned. buying options on margin

The term "margin" in options trading refers to two distinct scenarios: Requirement Purpose Buying (Long) Usually 100% of premium (except LEAPS). Payment for the contract. Selling (Short) Varies (Initial + Maintenance). Trading options on margin allows you to leverage

If the value of your account equity falls below the Maintenance Margin , your broker will issue a margin call, requiring you to deposit more cash or liquidate positions immediately. buying options on margin