What is options margin?
A broker may require collateral for short-option obligations. Required collateral, account buying power and potential loss are different quantities. A position can lose more than its initial margin. House requirements and portfolio offsets can change the amount a broker requires.
This free tool is an educational equity-option illustration. It accepts only standard 100-share contracts, using the latest available option daily close as a hypothetical premium and a separate stock quote. It does not know your fills, account balance, broker rules or current maintenance marks.
How to use the estimates
- Select a supported stock or ETF ticker, a future expiration and optional positive strike limits. The initial date is 30 calendar days ahead; it may not be a listed expiry.
- Load the first option-snapshot page. The 250-contract cap and strike sorting can omit contracts. Read the coverage notice.
- Choose a short call, short put, call or put vertical, short straddle or short strangle. Enter a whole contract quantity from 1 to 999.
- For multi-leg setups, choose contracts with the same expiry and known matching daily-bar dates. Read the actual direction label and the net premium cash flow.
- Confirm requirements with your broker before placing an order. No buying-power or maintenance value is produced here.
Formulas and cash-flow conventions
For a short equity call, the per-share reference is premium + max(20% × stock price − out-of-the-money amount, 10% × stock price). For a short equity put, the second term is 10% × strike. Multiply the result by 100 and quantity. The funding component subtracts the hypothetical premium from that formula amount; it is not account buying power.
For same-expiry verticals, debit-direction loss is the net debit. Credit-direction loss is strike width minus net credit. These amounts are multiplied by 100 and quantity. For example, a hypothetical $5-wide credit spread collecting $1.20 has an expiration loss bound of $380 for one standard contract pair before costs. The credit is not subtracted a second time from the displayed spread estimate.
A short call and put combination uses the higher uncovered-leg formula plus the other leg's premium. This page requires the same strike for a straddle and put strike below the stock quote below call strike for a strangle. Short-put maximum loss includes the premium offset; short-call upside loss is unbounded.
Data and strategy limits
Daily closes may be stale and are not executable bid/ask prices. Even matching bar dates do not ensure simultaneous prices. Inconsistent vertical prices, missing closes and invalid legs withhold calculations. Adjusted contracts and non-100-share multipliers are excluded rather than silently priced as standard contracts.
The formulas omit fees, taxes, house add-ons, portfolio margin, existing positions, account permissions and maintenance revaluation. Expiration payoff bounds assume the legs remain intact; early assignment, exercise and subsequent stock exposure need separate analysis. Broad-index and other product rules are outside this equity illustration.
Sources
Cboe: strategy-based margin · FINRA Rule 4210 · Massive: option snapshots. These sources describe rules and data; this limited calculator is not a broker margin determination.