Margin
The collateral required by a broker to maintain a short options position or leveraged trade.
Explanation
Selling naked options requires margin because of the potentially large losses. Margin requirements vary by strategy: defined-risk spreads require less margin than naked options. Reg-T margin is the standard; portfolio margin (PM) offers reduced requirements for diversified accounts. Margin calls occur when account equity falls below maintenance requirements.
Example
Selling a naked put on AAPL at the 140 strike might require $2,800 in margin (20% of notional), while a defined-risk put spread might only require the max loss amount.