If you trade options, your broker deal will always hold money on the side for any strategies that can create limited or unlimited risks. This process of setting aside money is called Option Requirement. When you sell Short Puts or Short Calls, or when doing Debit Spreads or Credit Spreads, at certain point if the market sells off or goes against you, you may sustain losses for the given position. So, the broker deal goes through a process of looking at all your positions and analyzing how much money you may lose if the market goes against you.

Normally Short Puts and Short Calls have higher requirements, usually in the order of greater that 20% of your Strike Price. On the other hand, Calendar Spreads do not require any Option Requirements as no amount will be set aside. Debit Spreads do not need any requirement as the debit is paid up front. For Credit Spreads, the requirement is the difference in the Strike Price and the credit received during the trade.

Return on Capital is the most important part of the Trading Plan. Since the broker deal will always be holding money on the side, you cannot leverage that money if you wait until expiration. So it is always better to keep in mind what your targeted Return on Capital and to close your position before expiration once it is reached.

In order to avoid trading on your impulses, especially when the market goes against you, you have to keep in mind the Maximum Drawdown of your portfolio. Option Requirements can be a great proxy for determining how much money you may lose as a result of market sell-off. So, always pay attention to Option Requirements when trading.