Uncovered Call Writing Margin Requirement Rule
What is the standard FINRA initial margin requirement for writing an uncovered equity call option?
Uncovered equity options margin = Premium + 20% of Underlying Market Value minus Out-of-the-Money amount (subject to minimum of Premium + 10% of Market Value).
Complete Analysis & Legal Rationale
FINRA Rule 4210 requires writing uncovered calls to deposit: 100% of the option proceeds + 20% of the current market value of the underlying stock, minus out-of-the-money amount, but never less than premium + 10% of market value.
Distractor Autopsy (Why Other Options Are Traps)
FINRA exam writers design incorrect distractors using specific calculation mistakes and regulatory misconceptions. Review why each option succeeds or fails:
Matches FINRA Rule 4210 exact margin calculation for naked equity options.
Reg T 50% applies to purchasing marginable stock, not writing uncovered options.
That is the cash-covered put requirement, not uncovered call.
25% is the long equity minimum maintenance requirement.
Official Standard: Establishes margin formulas for uncovered equity option contracts.