say I have a brokerage account with just about 5k in it on margin. It says I have about 20k in buying power. ok all my trades are basically vertical spreads or butterfly safe covered stuff. If I have to buy stock because of having the call exercised or the stock put to me will my margin cover it.
I read I believe on a government site you needed %50 of the purchase price in cash for any stock purchase (although I am not sure if this is accurate). So lets say I had to purchase 12,000 in spy on a put I sold as it was exercised and assigned to me. I only have 5k in cash in my account which is not %50 of 12k. But brokerage says I have 20k in buying power. So how does all this work I guess, does my 20k margin to buy the stock or do I need to have my margin and 6k cash in my account?
I read I believe on a government site you needed %50 of the purchase price in cash for any stock purchase (although I am not sure if this is accurate). So lets say I had to purchase 12,000 in spy on a put I sold as it was exercised and assigned to me. I only have 5k in cash in my account which is not %50 of 12k. But brokerage says I have 20k in buying power. So how does all this work I guess, does my 20k margin to buy the stock or do I need to have my margin and 6k cash in my account?