Margin Requirement for Ratio Call Spread

[tmhkick01 10]

I am trying to better understand margin requirement and how to calculate the margin maintenance requirement of a ratio call spread. From what i have read online so far the margin requirement is to cover the naked portion of call options sold. Also does the equity in the call options purchased offset the amount of margin needed?

 

For example:

If i buy 10 call options at a 30 strike for a premium of $4/option and sell 20 call options at a 35 strike for $2/option what would my margin requirement be if the stock is at 30, 35, 40? Also if someone could explain the exact formula along with if the equity in the call options purchased offset a portion of:confused the margin amount.

 

Thanks!

[SIUYA 11]

the exchange will have the formula and a lot will do with the broker you use.

They usually have to comply with the exchanges minimums but also may apply their own.

As a general rule you have to pay for the long options - so there is no margin.

The short options are margined - this then depends on the broker...eg; some brokers will stress test and require less margin as you have calls, others may margin the calls in addition to the call costs.

The broker should be able to give you are formulaic answer - if not suggest maybe another broker?