Question
A trader writes five naked call option contracts, with each contract being on 100 shares. For each option, the price is $7 (per share), the
A trader writes five naked call option contracts, with each contract being on 100 shares.
For each option, the price is $7 (per share), the time to maturity is six months, and the strike price is $64.
(a) What is the margin requirement if the stock price is $58?
(b) How would the answer to (a) change if the rules for index options applied?
(c) How would the answer to (a) change if the stock price were $70?
(d) How would the answer to (a) change if the trader is buying instead of selling the options?
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Intermediate accounting
Authors: J. David Spiceland, James Sepe, Mark Nelson
7th edition
978-0077614041, 9780077446475, 77614046, 007744647X, 77647092, 978-0077647094
