Earlier on in my option trading ,I completely disregarded the whole margin concept and the relevant rules and requirements in maintaining margin.
Now after blowing up so much I am very careful in ensuring my trades are backed by a comfortable margin that will absorb any increase in option price. The increase is mostly because of a sudden jump in IV.
That being said, one has to be very careful, some brokerages do not issue margin calls, making it completely the traders' duty to keep up with their margin requirements.
Ironically when I had more in the account I got liquidated twice due to poor understanding and disregard of the warnings.
Now ever since I've had to rebuild my cash reserves I havent even got 1 margin liquidation warning.
Talk about learning the hard way.
Here's an e.g.
Cash = 1000$
Margin = 1000$
Total funds = 2000$
Place a complex option strategy involving short positions = cash may increase but margin will decrease
Now cash = 1200
Margin available = 200
If the option moves contrary to your desired movement on the short side, the position will be liquidated based on FIFO until the Margin exceeds 1$.
Be careful, factor in margin fluctuations when you place a trade, give yourself a comfortable cushion.
Also margin requirements are very fluid and dynamic and change throughout the day, you have to be very very careful.
My rule is at least twice the margin requirement, so if say a strategy required 2800$ worth of margin, I try to keep 5600$ in Available Funds.
There are exceptions, e.g. Iron Condors and Verticals.