710 Margins(Page 158-159 Margins are required when options are sold When a naked option is written the margin is the greater of 1 Atotal of 100% of the proceeds of the sale plus 20% of the underlying share price less the amount (if any) by which the option is out of the money 2 A total of 100% of the proceeds of the sale plus 10%of the underlying share price For other trading strategies there are special rules Options, Futures, and other Derivatives, 5th edition 2002 by John C. HullOptions, Futures, and Other Derivatives, 5th edition © 2002 by John C. Hull 7.10 Margins (Page 158-159) • Margins are required when options are sold • When a naked option is written the margin is the greater of: 1 A total of 100% of the proceeds of the sale plus 20% of the underlying share price less the amount (if any) by which the option is out of the money 2 A total of 100% of the proceeds of the sale plus 10% of the underlying share price • For other trading strategies there are special rules