Today I used a bear put strategy and I was surprised to see that some funds in my trading account were locked up as margin used. It is well known that the potential loss in bear put strategy is limited. Why the lock up?


There are various types of 'bear put' strategies and some require margin while others don't. I'm going to assume that you are utilizing a basic vertical spread.

If it's a debit spread, there is no margin requirement since the risk is what you pay for it. If it's a credit spread then the margin requirement is the difference in strikes less the premium received.

  • I have bought 1520PE and sold 1500PE. But still in my trading account it is showing margin used 144000. – Rohit Bhardwaj Oct 29 '18 at 15:28
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    Brokers in the US have the right to require more margin than Reg T (when there is a margin requirement). If you're outside the US, regulations may be different. Call your broker to get an answer. – Bob Baerker Oct 29 '18 at 15:45

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