Option Margin - Bull Put or Call

[Brennen81]

Hello,

I am trying to finish a spreadsheet and am stuck on the calculation on bull plays. I understand the initial short margin calculations of --> 0.3 x Underlying - Out of the money difference. I am in Canada so it is 0.3 (30%). That I have working fine.

So when I add/purchase another strike more out of the money, the margin requirement comes down significantly and is different for each strike. I am not sure how this is calculated or can be put in a formula.

Does anyone know how this works?

Thanks for all.

 

[Brennen81]

I got it. Higher strike minus the lower strike (for puts). Ex. Short $37 put and long $35 = $200 margin. Plus the cash credit, which essentially lowers the margin further by that amount.