his pinkness...where do i trade...more like where do i invest!!!
to sell puts you must have a margin account...the puts sold are against your current margin capacity, with adjustments made for premium and in/out of money...your brokerage should include in margin calculation not just cash but any normally marginable security.
i use a full service brokerage, morgan stanley dean witter, have my own personal broker which any serious investor should have..have choice of negotiated commissions or flat quarterly fee...not much more than a discount broker charges..especially on options..i'm able on a regular basis to sell puts to the value of my portfolio...as the portfolio grows so does your capacity.....
compare to margin..you go long, long appreciates, you borrow against margin...on and on until a reversal, stock drops...whoops
sell puts, premium adds to capacity go long, more capacity, more puts,more long...capacity grows, positions accrue and if done properly your put exposure remains static...good luck, ed a. |
