If naked call write require ‘X’ margin i.e span+exposure-premium received & if naked put write as ‘Y’ margin i.e span+exposure-premium received.
Then why does Short strangle has margin requirement is ‘X+Y’….what is the use of this stragery when we can’t take margin benefits. (Return of Capital is low for retail due to high margin requirement)
If you talk abt risk management for a broker then in short strangle margin requirement…either the position will be close completely like bearish or bullish ( similar like naked call or put) or between the two strike……then why to charge ‘X+Y’ margin for short strangle it should be X or Y or X+10-15% or Y+10-15%
Allow the Retail Traders to benefit like Big Traders ( in they own capacity keep your risk management at logical level)