### Comment:
I use Merrill Edge and they require the cash upfront.  It’s then put in a side pocket type classification and can’t be used until the put expires.  It’s always made sense to me as why would the broker allow you to be on the hook for more than you could afford?

### REPLY:
Personally, I don't like that. Keeping 20% as collateral is fine to guard against the drop. In case stick drops more than that, I'll prefer auto liquidation in margin call for brokers to keep their risk manageable, rather than keep full collateral. For good stocks, there's no need to put full collateral for an option 2-3 weeks out, because it's highly unlikely stock would drop to 0. 
     
 Also, to me, keeping full collateral seems to be the lazy way out for brokers.

### END.