Use of margin

[Schopen]

If I am short a put with the cash in my account, if some of this cash is used in margin calls will I get it back in a timely enough fashion to buy the underlying if my strike is breached?

Does anyone know what the standard broker practice is with this?

 

[traderum]

If I am short a put with the cash in my account, if some of this cash is used in margin calls will I get it back in a timely enough fashion to buy the underlying if my strike is breached?
Does anyone know what the standard broker practice is with this?

If you close the option position w/o exercising then things should be simple.
Then the margin will be released IMO immediately, and you can buy the underlying...

 

[Rhody Trader]

Confirm with your broker, but if the option is exercised it no longer actually exists as an option anymore. That means margin is no longer required, so it should be freed up upon execution. Also, stock trade settlement takes a number of business days (3 in the US, for example), so even if the margin release isn't instantenous there should be plenty of time for it to be loosed before the cash would actually have to leave your account.

 

[A Dashing Blade]

Confirm with your broker, but if the option is exercised it no longer actually exists as an option anymore. That means margin is no longer required, so it should be freed up upon execution. Also, stock trade settlement takes a number of business days (3 in the US, for example), so even if the margin release isn't instantenous there should be plenty of time for it to be loosed before the cash would actually have to leave your account.

Putting it another way . . .
The margin should be released by close of business on the day the option is exercised against you (assuming T+0 settlement for options) as you no longer have a marginable position.
The fact that you have an outstanding T+3 settlement position is irrelevent.

 

[Schopen]

Awesome. Thx. I'm developing a half-baked strategy here. I know I should look this up - apologies - how frequently are there options contracts on stocks (UK, US,..)? I am assuming every three months.