Example #4 — Impact on Margin Calls Due to Receipt of Margin Collateral and Unfavorable Market
Movements on Same Day
Assume: Cash deposit of $5,000 received Wednesday
Favorable market movement of $5,000 occurred on Tuesday
Monday Tuesday Wednesday Thursday Friday
Ledger Balance 38,000 38,000 43,000 43,000 43,000
Open Trade Equity 10,000 15,000 6,000 6,000 4,000
Net Option Value 2,000 2,000 2,000 2,000 2,000
Net Liquidating Equity 50,000 55,000 51,000 51,000 49,000
Outstanding Calls -0- 10,000 5,000 9,000 9,000
SUBTOTAL 50,000 65,000 56,000 60,000 58,000
Initial Margin 60,000 60,000 60,000 60,000 60,000
Maintenance Margin 58,000 58,000 58,000 58,000 58,000
Amount Under Maint. 8,000 -0- 2,000 -0- -0-
CALL/AGE 10,000 (1) 10,000(2) 5,000(3) 5,000(4) 5,000(5)
4,000(1) 4,000(2) 4,000(3)
Example #5 — Impact on Margin Calls Due to Favorable Market Movements less than Total Margin
Call Outstanding
Assume: No margin collateral was deposited during week.
Favorable market movements occured on:
Tuesday $3,000
Thursday $6,000
Monday Tuesday Wednesday Thursday Friday
Ledger Balance 38,000 38,000 38,000 38,000 38,000
Open Trade Equity 15,000 18,000 12,000 18,000 15,000
Net Option Value 2,000 2,000 2,000 2,000 2,000
Net Liquidating Equity 55,000 58,000 52,000 58,000 55,000
Outstanding Calls -0- 5,000 5,000 8,000 8,000
SUBTOTAL 55,000 63,000 57,000 66,000 63,000
Initial Margin 60,000 60,000 60,000 60,000 60,000
Maintenance Margin 58,000 58,000 58,000 58,000 58,000
Amount Under Maint. 3,000 -0- 1,000 -0- -0-
CALL/AGE 5,000 (1) 5,000(2) 5,000(3) 5,000(4) 5,000(5)
3,000(1) 3,000(2) 3,000(3)
NOTE: Margin calls may only be deleted due to favorable market movements when margin equity in the account
equals or exceeds the initial margin requirement. Thus, the increase in OTE on Thursday of $6,000 cannot delete
the individually aged $5,000 margin call.
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