Building on Margin I, this advanced series covers the more complex margin requirements and calculations for various types of option positions, such as covered and uncovered puts and calls, index options, spreads, straddles, and combinations. It also teaches margin rules for day trading equities and options. A Core NYIF Curriculum.
This curriculum is made up of the following modules:
Review of margin definitions, terminology and requirements for equity securities
Regulation T and maintenance calls
Options background and terminology
Duration : 1 hour
Long option purchases and sales
Exercising long options
Short options
Duration : 1 hour
Making option purchases in margin accounts
Regulation T and maintenance requirements for long option purchases and sales
Off-setting purchases and sales
Buying power
Duration : 1 hour
Covered calls
Uncovered calls
Covering and expiration of uncovered calls
Duration : 1 hour
Covered puts
Uncovered puts
Covering and expiration of uncovered puts
Duration : 1 hour
Defining day-trades and day-traders
Review of margin requirements and calculations for day-trading equities
Margin requirements and calculations for day-trading options
Proposed changes to margin rules for day-traders
Duration : 1 hour
Spreads
Straddles and combinations
Matching options and securities for margin purposes
Duration : 1 hour
Definition and cash settlement vs. physical settlement
Margin requirements, calculations and examples
Recognize the concept of margin, the two customer account types, and the basic terminology used in margin trading
Identify basic option terminology and related transactions.
Differentiate between long and short options
Explain the execution of long and short options in a cash account
Describe covered options
Discuss how an escrow agreement is used in option trading
Recognize the leverage benefits of trading with margin and options
Determine how Regulation T and maintenance requirements affect long option purchases and sales in margin accounts
Identify how same day substitutions, offsetting purchase and sale of long options, and margin for long listed options each affect
Identify basic characteristics, regulations, and requirements of covered calls in margin accounts and compare level of risk with that of uncovered calls
Recognize basic characteristics, regulations, and requirements of uncovered calls in margin accounts
Perform margin calculations for in the money, at the money, and out of the money uncovered call options
Calculate margin requirements for new vs. established uncovered calls
Compute Regulation T excess and identify how to apply the results.
Identify margin regulations and requirements that apply to covered and uncovered puts
Calculate margin requirements and margin calls for uncovered puts
Recall details about margin release from covering naked puts and from naked put expiration and assignment
Recall day-trading margin rules for equities
Identify day-trading margin rules for options
Determine margin requirements for more than one option day-trade in a day
Define spreads, straddles and combinations. Calculate initial and maintenance margin requirements on spread transactions. Calculate initial and maintenance margin requirements on straddles and combinations
Describe how breaking straddle/combination positions impacts margin requirements
Recognize factors determining the best way to match options and stocks for margin purposes. Compare and contrast different types of index options and transactions using index options
Identify the rules and regulations that govern index options in cash accounts. Recognize the rules and regulations that govern index options in margin accounts
Margin, compliance, credit control personnel, and operations professionals