can i create a debit spread in stock options using only the pledge money (50% Liquid + 50% Index Funds)? and without using any cash? if no, what is the amount of cash needed?
Cash or cash equivalent is required. liquid bees/funds are equivalent to cash. So yea you can use them as cash.
The margin will get used from the collateral pledge, but you still need to have a cash balance for the debit amount.
Eg: if debit spread margin requirement is say 40000 and the net debit is say 1400
then the 40k will be used from collateral and your cash balance of 1400 needs to be available. The same will be debited & your cash balance will fall to zero next day.
When you square off
- if you sell at profit then the profit amount + 1400 is paid back
- if you let it expire at loss, then the 1400 is not paid back
thanks this helps