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Do buyers of put options have to post margin? Explain why?

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User Ryan Erb
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1 Answer

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This is because when you buy a Call or a Put Option, your potential loss is limited to the premium amount paid. You cannot lose more than the premium amount paid to buy the Options whereas your profit can be unlimited. As the risk is already covered by the premium amount, so there's no need to deposit a margin for Options buyers.

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User Pepeluis
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