Post #8421 by Mark on the Berkshire Hathaway board

Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A)

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But also, they do tie up capital.

But once the stock made its big move, they don't tie up as much capital as you would think. In my previous post, the put I mentioned in my example is a 140 strike price and the stock is now trading at $224, and the option is now trading at $0.25. That means, if I am calculating correctly, my capital tied up is $14 + $0.25, or $14.25 (That's even LESS than the price I received for selling those options back in late '22), and even though it is tied up, it still earns interest for me all the while.

Here's a link to the way margin is typically calculated for various option trades or combination option trades - https://www.tradestation.com/pricing/options-margi...

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