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Is the PUT option position automatically closed when the loss is equal to margin?


danielk

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Hi, I have an PUT option position opened that is starting to loose money. Is that position going to be automatically closed when the loss is equal to the margin?

I have some extra funds that I don't mind risking on my bet so I would prefer to keep the position opened. 

 

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8 hours ago, danielk said:

Hi, I have an PUT option position opened that is starting to loose money. Is that position going to be automatically closed when the loss is equal to the margin?

I have some extra funds that I don't mind risking on my bet so I would prefer to keep the position opened. 

 

Hi @danielk

Thanks for reaching out. 

If you buy options, the maximum loss is your premium (margin). Options are cash settled. You have the option to exercise it before expiry or leave it until expiry. Nonetheless, the maximum loss would still be your premium regardless of where the strike price is. All the best, OfentseIG

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