Buying Options On Margin Guide

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

Borrowing from your broker isn't free. You will accrue Interest on any debit balance, which can eat into your potential profits. buying options on margin

Options with 9 months or less until expiration cannot be purchased on margin. You must pay 100% of the premium upfront. In a traditional stock trade, Regulation T typically

Options with more than 9 months to expiration are often marginable. You may be allowed to borrow up to 25% of the cost, meaning you must put up an initial margin of 75%. In a traditional stock trade