Reverse Conversion

(Short Stock, Short Put and Long Call with the same strike price and expiration)

Initial $5.00/share and below: greater of $2.50/share or 100% + cost of call option and no requirement on short put

Initial above $5.00/share: greater of $5.00/share or 50% + cost of call option and no requirement on short put

Maintenance long call in the money: 10% of the call strike price

Maintenance covered put in the money: 10% of the strike price + 100% of in the money amount of the put

 

 

The market values and margin rates used to compute the initial and maintenance margin scenarios utilize OptionsHouse house standards. Higher margin rates may be utilized when calculating these scenarios.

The amount of money you can borrow on margin toward the purchase of securities is typically limited to 50 percent of the value of marginable securities in your account. However, it is prudent to borrow less to minimize risk.

Once you borrow on margin, you are required to maintain a certain amount of equity in your account, depending on the securities you hold. Typically, the equity maintenance requirement is at least 30% of the total account value, but it can be higher for certain securities or accounts.

Margin loans may be established by our clearing firm, Apex Clearing Corporation (“Apex”), in its sole discretion regardless of the amount of collateral delivered to Apex, and Apex may change such minimum and maximum amounts from time to time without notice to our customers.

In the interest of ensuring the continued safety of our clients, Apex may, without notice, modify certain margin policies to adjust for volatility in financial markets. The changes will promote reduction of leverage in client portfolios and help ensure that clients’ accounts are appropriately capitalized.