No. of Recommendations: 1
Hi all,

This 'margin' thing is doing my head in! Just when I think I understand it, the broker throws another curve ball.

Here is my story.

I was charged a small amount of interest following a recent option trade because I didn't have a positive net free equity balance.
Fair enough - so how is 'net free equity' balance calculated?

From broker website:
Net Free Equity (NFE) is:
- The cash balance of your main trading account (3,797 in my case)
- Plus or minus any unrealised profits or losses from open CFDs, FX Forwards and Futures on your main trading account (zero in my case)
- Plus the market value of any FX Options on your main trading account (zero in my case)
- Minus any margin required for financing open positions on your main trading account.

'Margin required'? I ask broker support to explain that in the context of my open positions. They reply-
Quote:-Please be informed the margin requirements is the base for the margin calculation, for the requirements. - Unquote

The only margin requirements I have relate to four open put option positions that I currently have. I can see the total margin available to me, and the % used, but I can't calculate the requirement for each of the four.

So my question here is how can I calculate what my total margin requirement on those open short positions, what figures do I use?

Anyone?

Thanks in advance.
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