Which One of the Statements About Margin Requirements on Option

question 35

Multiple Choice

Which one of the statements about margin requirements on option positions is not correct?

• A) The margin required will be lower if the option is in the money.
• B) If the required margin exceeds the posted margin, the option writer will receive a margin call.
• C) A buyer of a put or call option does not have to post margin.
• D) Even if the writer of a call option owns the stock, the writer will have to meet the margin requirement in cash.

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Definitions:

Boron Trifluoride

A chemical compound with the formula BF3, known for its role as a strong Lewis acid in organic and inorganic chemical reactions.

Octet

A rule in chemistry stating that atoms tend to combine in such a way that they each have eight electrons in their valence shells, giving them the same electronic configuration as a noble gas.

Methyl Chloride

A chemical compound with the formula CH3Cl, known for its use in industrial processes as a solvent and in organic synthesis.