EFTA Document EFTA01393131

The put writer's exposure to margin requirements can be eliminated if the put writer elects to deposit cash equal to the option exercise price with his broker- age firm. Under this strategy, known as cash-secured put writing, the option writer is not subject to any addi• tional margin requirements regardless of what hap- pens to the market value of the underlying interest. In the meantime, the option writer might earn interest by having the cash invested in a short-term debt instru- ment-f