An option whose underlying is a futures contract; exercise delivers a futures position, and margin is calculated under futures rules.
Exercising a futures option does not hand you barrels of oil or bushels of corn. It hands you a long or short futures-contract at the strike, which then behaves normally with daily mark-to-market.
Because margining runs through span-margin rather than reg-t-options-margin, the buying-power-reduction on a short option can be a fraction of the equity-market equivalent. That efficiency is real, and so is the leverage that comes with it.
Example: you are long one call struck at 70 on a crude future, contract size 1,000 barrels. You exercise with the future at 74. You now hold a long future at 70, immediately marked at 74, worth (74 − 70) × 1,000 = $4,000 credited through variation margin — plus a futures position you now have to manage.
Original diagrams for the ideas on this page. Illustrative, not real market data.
Margin and leverage. A $5,000 deposit can control a $100,000 position, which is 20:1 leverage. Because the loss is measured on the full $100,000, a 2.5% move against you halves the deposit and brings a margin call, and a 5% move uses all of it.
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