# Margin requirements for a short straddle or strangle

The margin requirements for a short straddle/strangle is the greater of the two sides' short uncovered margin requirement plus the premium of the other leg.

*The premium received from the sale of the strangle may be applied to the initial margin requirement.

## Example of Selling a Straddle or Strangle in a Margin Account

With the underlying at \$45,

Sell to open 1 Mar 47 call at \$2.10

Sell to open 1 Mar 43 put at \$1.20

### Mar 47-strike Call Margin Requirement

[((.20 x 45) - 2) + 2.10] x 1 x 100 = \$910 highest margin requirement

Or

[(.10 x 45) + 2.10] x 1 x 100  = \$660

### Mar 43-strike Put Margin Requirement

[((.20 x 45) - 2) + 1.20] x 1 x 100  = \$820

Or

[(.10 x 43) + 1.20] x 1 x 100  = \$550

Since the 47-strike call has the highest margin requirement (\$910), this makes the total margin requirement \$1,030 since the premium from the put side (\$910 + \$120) is added to the margin requirement. The maintenance requirement for a short straddle will be calculated using the same formula.