Question: The initial margin requirement for writing a naked option is the premium plus 20% of the stock value plus any necessary adjustments for not being-at-the-money.

The initial margin requirement for writing a naked option is the premium plus 20% of the stock value plus any necessary adjustments for not being-at-the-money. Also assume the margin requirement for stock is 50%. An investor writes one (naked) call option. The option price is $4 at a strike price of $50 and a stock price of $52. What is the investors net cash outflow when entering this trade?
a)5000
b)1040
c)1440
d)2600

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