Re: [TheOptionClub.com] Worst Case Margin

 

Looks like we need a 3rd opinion to break this tie. Anyone willing to accept ridicule?

--- In OptionClub@yahoogroups.com, Murthy N <optionsmaya@...> wrote:
>
> Tom,
>
> Why would it be $1250 and not $2500 (forget the credit for the discussion)?
> 925-900, isn't it? Or did I miss something?
>
> Murthy
>
> On Mon, Mar 8, 2010 at 3:48 PM, Tom Mosher <inertia.trader@...> wrote:
>
> >
> >
> > This is not central to your question, but nevertheless I must point out
> > that your max loss would
> > actually be $1250 (not $2500) minus the $60 credit.
> >
> > The delta of an ES futures contract is (non-intuitively) 50, and this
> > applies to the options as well.
> >
> > Tom
> >
> >
> >
> > On Mon, Mar 8, 2010 at 2:04 PM, asdfffg1 <joshuas7@...> wrote:
> >
> >>
> >> This past Friday, the June 2010 E-mini S&P contract had daily movement
> >> around 1130 going into the close. In the last few hours of Friday's trading
> >> hours, we sold a ES June 2010 credit spread consisting of one short June
> >> 925put for $280, and the purchase of one June 900put for $220. This gave us
> >> a $60 credit. Lets say tonight, the ES market will tumbles in the globex
> >> session. Tomorrow morning, (Tuesday) we turn on the computer at 930AM where
> >> we observe the S&P market has plummeted to 800. Our largest possible dollar
> >> loss, after this devasting move, would be $2500, minus the $60 credit. If
> >> the trade would have been placed last Friday, with a $10000 margin account,
> >> what would be the absolute largest amount required for margin. It can't be
> >> more than $2500 can it? Thanks for the help.
> >>
> >>
> >
> >
>

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