The "daily Call" From Option Alpha: Options Trading | Stock Options | Stock Trading | Trading Online

Hey everyone, Kirk here again from Option Alpha and welcome back to the daily call. Today, we’re going to talk about the basics of trading options with margin. I think this is an interesting topic to talk about because most people who get started on options trading, they understand that they have to open up some sort of account that allows them to do trading. One of the accounts that you can open up is what’s called a margin account. And so, I want to describe basically what margin is and why it’s available, what happens, how it’s used to cover positions, etcetera. Basically, what is margin and why do you need it? Well, to understand margin, you have to first understand that it mostly applies to option sellers. Now, some accounts may apply margin to option buyers, but it’s not traditionally how it’s done. When you start trading options, if you buy options as the first course of business which most people might start by buying an option contract, they buy a call or buy a put, those contracts do not require any