### Comment:
Isn’t the collateral quite high though? Since it’d be the cost of buying 100 shares at strike.

### REPLY:
Required collateral is the spread between the strike you sold and the strike you bought. For example i sold SPY 304c and bought 305c expiring today (because so many degenerates here buy fd spy options). In this case, my collateral required is $100 per spread since that is the difference in strikes. Theoretically, this means my max loss is also $100 per spread. This sometimes is higher though because your brokerage (damn rh) may not close your long leg of the spread at a favorable price.

### END.