Question

In a new margin account, if a customer buys 300 XYZ at 48 and simultaneously writes 3 XYZ Jan 50 calls at 1, the Regulation T margin requirement is

Answer 1

$7,200

Step-by-step explanation:

Calculation for what the Regulation T margin requirement is

Since we were told that the customers buys 300 XYZ at 48 this means that the Regulation T margin requirement will be:

Regulation T margin requirement =(300 × 48)×50%

Regulation T margin requirement =$14,400×50%

Regulation T margin requirement =$7,200

Therefore the Regulation T margin requirement is $7,200