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"Covered calls" are covered by the underlying asset. That's not the same as a 100% margin requirement.
by rjtavares 13y ago
"Covered calls" are covered by the underlying asset. That's not the same as a 100% margin requirement.
- this_user 13y agoFrom the call writer's perspective it's indistinguishable from a covered call transaction. This also greatly reduces the service's usefulness as you are unable to implement many standard option strategies.
- rjtavares 13y agoThe initial transaction, yes, but not the final payoffs. I agree with you on the other issue (though you borrow money elsewhere to simulate a lower margin).