What Is the Margin Requirement for a Spread Trade (E.g. a Bull Call Spread)? ▴ Learn

What Is the Margin Requirement for a Spread Trade (E.g. a Bull Call Spread)?

The margin requirement for a spread trade, such as a bull call spread (long one call, short another call at a higher strike), is significantly lower than for an uncovered short option. This is because the risk is defined and limited by the difference between the two strike prices.

The margin only needs to cover this maximum potential loss.

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