What collateral is required for selling to open an option contract?

Depending on the options strategy that you deploy , we may hold stock or cash as collateral to make sure that you can cover the position in the case of assignment.

Options strategies that are collateralized by stock positions in your account

Selling to Open a Covered Call

You’ll need to have 100 shares per contract of the underlying stock in your long positions to cover the risk of assignment. As long as the covered-call position is open, you won’t be able to sell 100 shares of the underlying stock.

Selling to Open a Covered Put

You’ll need to have 100 shares per contract of the underlying stock in your short positions to cover the risk of assignment. As long as the covered-call position is open, you won’t be able to buy to cover 100 shares of the underlying stock.

Options strategies that are collateralized by cash in your account

Selling to Open a Cash-covered Put

We’ll set aside enough cash in your account as collateral to be able to buy the underlying stock at the contract’s strike price.

Pending Orders

When you place an options order, we’ll hold the appropriate collateral (cash or stock) beginning from the time that the order is submitted and becomes pending. The same way we hold enough cash to fill your pending order when you open an equity position, we’ll hold enough cash or stock to cover your option position until the order is canceled.