Question

"A customer has an existing margin account and wants to write five covered calls against 500 shares of stock in the account. The margin requirement to write the calls is:"

Answer 1

Answer: 0

Explanation: The sale of the stock call, would be covered by the ownership of the stock ( someone who owns the said stock). The required margin needed to sell the stock would be ‘0’ since there is no evidence that points to any available risks on the short calls. as short calls helps to predict of prices would drop or not.