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Hi irwinjj1108,

I'll add that most brokers just set aside a portion of the cash, and as long as you always have the equity available (stocks you are ready to sell, etc) and some cash, that's how you'll come to write puts as you become more experienced. It's rare that you'll have 100% of the cash just sitting on the sideline. More likely, you'll have positions you're planning to sell (maybe with deep in-the-money covered calls) and enough moving parts that you're managing for various outcomes with your options. Some options are also written without planning to take shares (instead, you roll the options again and keep waiting). With most strangles, the intent isn't to buy more shares, but to keep rolling the strangle.

But you are in general thinking about this correctly -- and cautiously! Which is great. As you start, secure all positions with cash. With experience, you'll have more moving parts and may feel fine not using 100% cash to secure everything, but your more than ample equity instead.


P.S. We don't borrow on margin to own a position, ever, or pay margin fees. Using your equity is a different matter.
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