Why Is Variation Margin Not Always Required for Options Contracts? ⎊ Path

Why Is Variation Margin Not Always Required for Options Contracts?

Variation margin is typically not required for options until they are exercised or assigned, as the premium is paid upfront. However, if the option is part of a margined portfolio (like a short option or a complex spread), the portfolio may be subject to variation margin if the net risk changes.

Futures-style options do require daily variation margin.

What Is the Difference between Initial Margin and Variation Margin (Maintenance Margin)?

What Is “Variation Margin” and When Is It Paid?

Does the Net Investment Income Tax (NIIT) Apply to Section 1256 Gains?

Distinguish between Initial Margin and Variation Margin

Is Marking-to-Market a Feature of European-Style Options?

What Is the Difference between Initial Margin and Variation Margin for Futures and Options?

What Is the Net Premium Received or Paid When Establishing a Zero-Cost Collar?

Why Is the Premium Generally Higher for an American-Style Option than a European-Style Option?