I have two questions about PDT that I was hoping someone may be able to help answer. For this example, assume I have $27,000 in my brokerage account which has margin enabled. If I were to buy 100 shares of company A at $100 a share, sell a weekly covered call at a strike of $105 and buy a 90-120 DTE put for $95, is it just the shares that are taken into account when determining whether my account meets the account minimum requirement of $25,000 or are the options counted as well?
For my second question, take into consideration that since the account balance is $27,000 and is a margin account, that would allow for marginal purchasing power of $54,000. If I were to use the same strategy above and purchase 300 shares at a cost of $30,000, would I still be able to purchase the puts even though it would be using margin? Does the answer to this depend on what options level is allowed with the account? Alternatively, if I were to purchase the puts first and then the shares, would that work since it would be shares that are being purchased with margin?
Sorry if they are dumb questions but anyone that is able to help some light, I will send you positive vibes.
Leave a Reply