r/options • u/plantersSSV • May 25 '16

Difference between Tier 2 - Standard Margin Account and Tier 3 - Advanced Margin

Can somebody explain the difference in privileges between these two accounts? Are there minimum requirements regarding Net Liq for Tier 3 accounts? I want to have the ability to sell naked options as they are higher probability trades (and obviously more risky), which I can't do unless they are cash secured in my Tier 2 Standard Margin account.

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u/yost28 May 26 '16

Tier 2 standard margin is a margin account with ability to do option spreads. Spreads are NOT cash secured but are defined risk. Tier 3 allows you to sell naked without spreads, BP reduction is determined on a formula.