Buying Options On Margin Direct

If the value of your account equity falls below the Maintenance Margin , your broker will issue a margin call, requiring you to deposit more cash or liquidate positions immediately.

In a traditional stock trade, Regulation T typically allows you to borrow up to 50% of the purchase price. Options differ significantly: buying options on margin

Using margin to trade options introduces layers of risk beyond standard cash trading: If the value of your account equity falls

While you often can't use margin to buy the options, you can sometimes use the value of your options as collateral to increase your overall account's Buying Power . The "Two Sides" of Margin Requirements The "Two Sides" of Margin Requirements Leverage can

Leverage can amplify gains, but it can also cause you to lose more than your initial investment if the market moves against you.