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Option margin requirements

Questrade has four approval levels for option trading that require different minimum balances in your account before placing your trade:

Level Minimum equity required
1 No minimum
2 No minimum
3 $5,000 CAD
4 $25,000 CAD

To change your option level, log into myQuestrade, select My accounts then Account management. Choose the account number and use the Option level drop-down menu to select a new level.

To place a Canadian multi-leg option order that includes a stock leg, or more than two option legs, please contact the trade desk at 1.866.980.9590. The trade desk is available Monday to Friday, 8:30 a.m. to 4:30 p.m. ET.

Option levels and margin requirements

Level 1
Strategy Margin requirement Trade in reg. acct.*
Long calls and puts 100% of the option’s market value. Yes
Long straddle/Long strangle 100% of the option strategy’s market value. Yes
Short covered call (protected short)

The value of either 1 or 2, whichever is greater:

  1. The sum of:
    1. 100% of the market value of the call option.

      and

    2. The lesser of:
      1. The normal margin required on the underlying security.

        or

      2. The out-of-the-money amount of the call option, plus the market value of the call, minus any in-the-money amount of the call option.
  2. 5% of the market value of the underlying security
No
Long married put

The value of either 1 or 2, whichever is greater:

  1. The sum of:
    1. 100% of the market value of the put option.

      and

    2. The lesser of:
      1. The normal margin required on the underlying security.

        or

      2. The out-of-the-money amount of the put option, plus market value of the put option, minus any in-the-money amount of the option.
  2. 5% of the market value of the underlying security.
Yes

* Strategies traded in registered accounts require 100% of the market value for each leg.

Level 2
Strategy Margin requirement Trade in reg. acct. *
Long covered call

The in-the-money amount of the call option, minus the market value of the call option.

Plus

The value of either 1 or 2, whichever is greater:

  1. The lesser of :
    1. The margin required on the underlying security.

      or

    2. The margin required on the aggregate exercise value.
  2. 5% of the market value of the underlying security.
Yes
Short married put (Covered put) The normal margin requirement for the underlying security. View credit requirements on short positions. No
Long collar

The value of either 1 or 2, whichever is greater:

  1. 100% of the market value of the long put options, minus 100% of the market value of the short call options, plus the difference (+/-) between the market value of the underlying security and the aggregate exercise value of the long put options (or the short call options), whichever is lower.
  2. 5% of the market value of the underlying security.
Yes
Short collar

The value of either 1 or 2, whichever is greater:

  1. 100% of the market value of the long call options, minus 100% of the market value of the short put options, plus the difference (+/-) between the market value of the underlying security and the aggregate exercise value of the long call options (or the short put options), whichever is lower.
  2. 5% of the market value of the underlying security.
No

* Strategies traded in registered accounts require 100% of the market value for each leg.

Level 3
Strategy Margin requirement Trade in reg. acct.
  • Long/short vertical call/put
  • Long calendar call/put *
  • Long diagonal call/put *

* Long and short calendar and diagonal strategies with European options are margined as separate legs. Please see level 4 for details.

100% of the market value of the spread.

Plus

The value of either 1 or 2, whichever is greater:

  1. The lesser of :
    1. The normal minimum margin requirement for the short option, plus market value of the short option.

      or

    2. The spread loss amount, if any, that would result if both options were exercised.
  2. 5% of the spread loss amount, if any, that would result if both options were exercised.
No
Long butterfly

The value of either 1 or 2, whichever is greater:

  1. The cost of the long options, minus the proceeds of the short options.
  2. 5% of the spread interval amount between the strike price of the long options and the short options.
No
Short butterfly

The value of either 1 or 2, whichever is greater:

  1. The spread interval amount between the strike price of long options and short options, plus the cost of the long options, minus the proceeds of short options.
  2. 5% of the spread interval amount between the strike price of the long options and the short options.
No
Long condor

The value of either 1 or 2, whichever is greater:

  1. The cost of the long options, minus the proceeds of the short options.
  2. 5% of the spread interval amount between the strike price of the long options and the short options.
No
Short condor

The value of either 1 or 2, whichever is greater:

  1. The spread interval amount between the strike price of long options and short options, plus the cost of the long options, minus the proceeds of short options.
  2. 5% of the spread interval amount between the strike price of the long options and the short options.
No
Long iron butterfly 100% of the option strategy’s market value. No
Short iron butterfly

The value of either 1 or 2, whichever is greater:

  1. The spread interval amount between the strike price of long options and short options, plus the cost of the long options, minus the proceeds of short options.
  2. 5% of the spread interval amount between the strike price of the long options and the short options.
No
Long iron condor 100% of the option strategy’s market value. No
Short iron condor

The value of either 1 or 2, whichever is greater:

  1. The spread interval amount between the strike price of long options and short options, plus the cost of the long options, minus the proceeds of short options.
  2. 5% of the spread interval amount between the strike price of the long options and the short options.
No
Level 4
Strategy Margin requirement Trade in reg. acct.
  • Short calendar call/put
  • Short diagonal call/put
  • Long/short calendar call/put with European options
  • Long/short diagonal call/put with European options

100% of the long option’s market value.

Plus

For the short option, the value of either 1 or 2, whichever is greater:

  1. A percentage of the market value of the underlying security, determined using the following values:
    1. For equity options, or equity participation unit options, the margin rate used for the underlying security.
    2. For broad based index options, 10%.
    3. For narrow based index options, 15%.
    4. For major currency options, 10%.
    5. For non-major currency options, 30%.

      minus

      Any out-of-the-money amount associated with the option.

    Or

  2. Either a or b, depending on whether it’s a short call or short put position:

    1. In the case of a short call option position, the market value of the underlying security, multiplied by 5% (2% for index options).
    2. In the case of a short put option position, the aggregate exercise value of the option, multiplied by 5% (2% for index options).
No
Short straddle / short strangle

The excess of the aggregated exercise value of the put option over the aggregate exercise value of the call option.

Plus

The value of either 1 or 2, whichever is greater:

  1. The short put requirement, plus market value of the put.

    Or

  2. The short call requirement, plus market value of the call.

Minus

The market value of the call and put.

No
Short option (naked option)

The value of either 1 or 2, whichever is greater:

  1. A percentage of the market value of the underlying security, determined using the following values:
    1. For equity options, or equity participation unit options, the margin rate used for the underlying security.
    2. For broad based index options, 10%.
    3. For narrow based index options, 15%.
    4. For major currency options, 10%.
    5. For non-major currency options, 30%.

      minus

      Any out-of-the-money amount associated with the option.

    Or

  2. Either a or b, depending on whether it’s a short call or short put position:

    1. In the case of a short call option position, the market value of the underlying security, multiplied by 5% (2% for index options).
    2. In the case of a short put option position, the aggregate exercise value of the option, multiplied by 5% (2% for index options).
No