How much margin do I need to sell a naked put?

Most brokers use a Reg T-style formula: the greater of (20% of the underlying price minus the out-of-the-money amount, plus premium received) or (10% of the strike price plus premium received). On a $100 strike put with the stock at $105 and $2.00 collected, that works out to roughly $1,800 per contract — far less than the $10,000 a cash-secured put would tie up, but the number rises as the stock falls toward the strike.

Does a credit spread require margin?

Yes. A standard vertical credit spread requires margin equal to the strike width times 100, minus the net credit received, and that amount is generally fixed for the life of the trade because the long leg caps the loss. This defined-risk treatment only applies when both legs share the same expiration and an equal contract count — calendars, ratios, and diagonals are usually margined differently.

Can my broker raise margin requirements without notice?

Yes. Regulatory formulas like Reg T set a minimum, not a ceiling — brokers can and do apply higher 'house' margin requirements, particularly on high implied volatility names or during broad market stress, and they can apply this to positions you already hold. If the account can't meet the new requirement, the broker can liquidate positions without additional notice.

Why Your Margin Requirement Just Doubled

By OptionScope Research Desk · Published August 17, 2026 · Updated August 17, 2026 · 7 min read

Dark night cityscape overlaid with glowing blue candlestick charts, binary code, and scrolling financial data numbers in a digital trading visualization. — Max loss is set by your contract. Margin is set by your broker — and it can move.

You checked the max loss before you entered. The platform confirmed it. Then your account flashed a margin requirement that didn't match — and a note that funds were due by end of day.

That gap between "max loss" and "margin requirement" catches more traders than any single Greek does.

Here's what actually gets locked up when you sell options, and the exact conditions under which your broker can move that number without you touching the position.

Three margin regimes, three different formulas

What "margin" means depends entirely on how the position is structured. Confusing one regime for another is where the surprise comes from.

Cash-secured puts: no leverage, no surprises

The full strike value is held in cash — a $50 strike put ties up $5,000, in full, regardless of the premium collected.
The number is fixed the moment you enter and released at close or assignment. It never moves against you mid-trade, because there's no leverage in the structure to begin with.
The tradeoff is capital efficiency: you're financing the entire potential purchase, not just the risk of it.

Naked short options: the formula that moves with the stock

Most brokers apply a version of the Reg T formula: initial margin is the greater of

20% of the underlying price − the out-of-the-money amount + premium received, or
10% of the strike price + premium received

Worked example: stock at $105, you sell one naked $100 put for a $2.00 credit.

(a) 20% × $105 = $21.00; OTM amount = $5.00; $21.00 − $5.00 + $2.00 = $18.00/share = $1,800
(b) 10% × $100 = $10.00; + $2.00 = $12.00/share = $1,200
The greater of the two, $1,800, is your initial margin — versus $10,000 to secure the same put with cash. That gap is the leverage naked selling buys you.

Now watch what happens if the stock drops toward the strike: the OTM amount shrinks, then flips negative once price trades below $100, and the formula starts adding the in-the-money amount instead of subtracting it. A $10 drop in the stock can push that same contract's margin from $1,800 past $3,000 — without you doing anything to the position.

Defined-risk spreads: margin locked at max loss (usually)

A standard vertical — same expiration, equal contract count on both legs — margins at strike width × 100, minus the net credit received. That number is fixed for the life of the trade because the long leg guarantees your worst-case exit price.

Example: sell the $95 put, buy the $90 put, collect $1.50 net credit. Width = $5. Margin = ($5.00 − $1.50) × 100 = $350. It won't move no matter how far the stock falls, because the long put caps it.

The catch: this locked-margin treatment only applies when the broker actually recognizes the position as defined-risk — same expiration date, 1:1 contract ratio, no skipped strikes. A calendar spread, a ratio spread, or a diagonal frequently gets margined as if the short leg were naked, because the long leg doesn't expire on the same day and can't guarantee the exit.

Core Rule

Max loss and margin requirement are not the same number. Max loss is set by your contract. Margin requirement is set by your broker — and it can change.

Why a "defined-risk" position can still trigger a call

House margin above Reg T minimums. Reg T is a regulatory floor, not a ceiling. Brokers routinely require more collateral than the minimum — especially on elevated-IV names or during broad volatility spikes — and can apply the higher house rate to positions you already hold, not just new orders.
Portfolio margin recalculates from risk, not from a fixed formula. Portfolio (SPAN-based) margin stress-tests the whole account across price and volatility scenarios. A spread that looked flat under Reg T rules can show a materially different requirement once IV assumptions move, even though the contract's max loss hasn't changed at all.
Early assignment turns defined risk into uncovered risk. If the short leg of a spread is assigned early — common on in-the-money calls near an ex-dividend date — you're temporarily holding stock or a naked position until the trade unwinds, and the account can show a margin call for that gap before the fix executes.

The pre-trade routine

Before submitting any multi-leg order, check the platform's buying power effect line, not just the theoretical max loss. If the two don't match, find out why before you click send.
Confirm both legs share the same expiration and an equal contract count. Unequal ratios or calendar structures usually lose defined-risk treatment and get margined like a naked position.
On naked short positions, size as if margin could increase 50–100% intraday during a volatility spike — hold a buffer above the minimum, not right at it.
Read your broker's house margin schedule for the specific underlying before selling naked options on high-IV names; house rates are usually published but rarely surfaced at order entry.
On portfolio margin, recheck buying power after any sharp IV expansion. Yesterday's number doesn't hold once the risk model recalculates.

What the numbers won't tell you

Reg T formulas are a floor, not a promise — your broker can and will require more, on its own schedule.
Portfolio margin can cut buying power sharply in a fast market, forcing liquidations at the worst possible prices.
A margin call doesn't wait for you to log in. Once the deadline passes, brokers can liquidate positions without further notice.

Risk Check

Every structure here can end in a forced liquidation you didn't choose the timing of. Cash-secured puts remove that risk but tie up full capital doing it. Selling naked or entering unequal spreads for capital efficiency means accepting that the number required to hold the trade can move against you exactly when the market does.

Make the number part of the trade

Margin isn't a background detail your broker quietly handles — it's a live position you're carrying alongside the option itself.

Check it before entry, recheck it after any large move, and never assume "defined risk" means "defined margin."

The takeaway

Your max loss is fixed by contract. Your margin requirement is fixed by your broker — until it isn't.

Next time you check a trade's max loss, will you check the margin number sitting right next to it — and know why they might not match?

Options involve substantial risk and are not suitable for every investor. Nothing in this article is a recommendation to buy or sell any security. Before trading options, read the OCC's Characteristics and Risks of Standardized Options.

Related reading: vertical spreads explained · covered calls vs. cash-secured puts · position sizing in high-volatility regimes · or model buying power before you place the order in the OptionScope workspace.