The final day for dealing in options contracts for a particular expiry month. Lot One equity or index options contract, e.g., a contract representing 1,000 shares or 10 x Index level. Margin Funds that an option writer must maintain on deposit with his broker to assure his ability to fulfill his financial obligation to make or take delivery of the underlying shares. Buyers of equity options, because they pay the entire option premium when the option is purchased, have no further financial obligations and are not subject to a margin requirement. However, should an option buyer exercise his right to acquire the underlying shares, he would then become subject to the margin requirements applicable to the shares acquired.
Margin is called from the time the option is exercised until the equity transaction is settled.
Margin in respect of the equity transaction is called from both the seller and the buyer of the shares. Opening purchase A transaction whereby the buyer becomes the holder of an option. A transaction whereby the seller becomes the writer of an option. The net long and short amount of outstanding positions in a particular contract. An option that has no intrinsic value.