What are the margin requirements for trading US-listed options and futures?
When trading US options and futures, you can open a cash account or a margin account. When you open a position in a cash account, you must pay for the total cost of the trade upfront. However, with a margin account, you can use leverage to trade marginable assets.
Note that US exchange-listed stocks are marginable, but other assets aren’t.
Non-marginable assets
- Stocks below $3
- OTCBB/unlisted penny stocks
- Long and short options
- Futures
- Options on futures
- Volatility-based ETFs and ETNs
Your initial margin requirement is the amount of buying power (BP) needed to open a position. Standard margin accounts use a fixed-percentage, strategy-based system. Initial requirements affect opening orders on stocks and ETF shares and are typically 50% of the position’s value. But, in certain scenarios, margin may be higher.
Let's take a look at the BP requirements of some commonly traded products and strategies. These can change at any time and may vary based on the underlying’s price.
| Product and strategy | Margin/BP required | Marginable |
| Long stock or ETF shares | Typically, 50% initial requirement and 25% maintenance of the underlying value1 | Yes |
| Short stock or ETF shares |
| Yes |
| Long options | Cost of the options (debit paid) | No |
| Long options spreads2 | Cost of the spread (debit paid) | No |
| Uncovered/naked/short calls | The greatest of the following:
| No |
| Uncovered/naked puts | The greatest of the following:
| No |
| Short options vertical spreads2 | Spread width minus credit received | No |
| Futures | Overnight requirement (subject to risk profile) Note: instead of the entire overnight requirement, intraday futures provide 4x leverage or 25% of the initial margin requirement | No |
| Long options on futures | Cost of the spread (debit paid) | No |
| Short options on futures | SPAN margin requirement | No |
| Long/short options on futures spread | SPAN margin requirement | No |
