Premium Margin

The Premium Margin must be pledged by the holder of a short options position, and must be maintained until exercise or expiration. It covers the seller?s close-out costs, as measured by the settlement price. Premium Margin is continuously adjusted. Option buyers do not have to pledge any margin. By paying the option premium they have acquired a right, but have not undertaken any obligations. Their maximum risk is that the contract can expire worthless. Hence the risk is limited to the option premium.

Literatur:

Bloss, Michael; Ernst, Dietmar; Häcker, Joachim: Derivatives, 283 Seiten, 2008
[Dieser Titel bei Oldenbourg]