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Although the term is often used loosely, pyramiding typically refers to the practice of using the excess margin or 'buying power' generated by a successful speculative operation to increase the commitment to that operation. In options, an example might be the naked option writer who writes more options as a favorable move in the price of the underlying frees up margin. A buyer might sell a profitable in-the-money position and invest the proceeds in a larger number of at-the-money options. Pyramiding is probably more common in futures than in options trading, because margin requirements are often lower.
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