... reduced for out -of -the- money options, let’s review the concepts of in, at, and out of the money. Ingeneral, options are in the money when it is profitable toexercise them, and out of the money when ... the client owes the brokerage firm the value of the borrowed stock. Also,since a sale was effected in the account, there is a creditbalance for the amount of the short sale.It is exactly the ... of the value of the underlying stock (reduced byany out of the money amount, but not less than 10 per-cent of the underlying’s value) plus the premium.Note: You must calculate 20 percent of...