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What Is the Relationship between Premium and Margin for an Option Seller?

Premium received reduces the margin required for the option seller.
Greeks.Live22.11.25

What Is the Relationship between Premium and Margin for an Option Seller?

The option premium received by the seller reduces the margin required to hold the position. Margin is the collateral needed to cover potential losses.

The premium received is subtracted from the initial margin requirement, providing a capital benefit.

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