Selling Put Options To Buy Stocks - Understanding How To Buy And Sell Stock

Therefore, if you purchase stock for $20,000 using $10

,000 of your own and $10,000 borrowed than you must maintain 30% of the $20,000 at all times which is $6,000 of your own money in the account. Keep in mind that the money you borrow will never change so if that $20,000 in stock lost 20% of it's value then you would have ($20,000 * .8) $16,000 in stock left; $6,000 which is of your own money and $10,000 which is still the lenders money. If the stock fell anymore than that they are allowed to sell your shares unless you add more cash to the account. Selling Put Options To Buy Stocks

Selling Put Options To Buy Stocks - Understanding How To Buy And Sell Stock

By: Trading Expert

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