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Technology Stocks : INTEL TRADER
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To: Chris who wrote (5193)1/26/1999 3:17:00 AM
From: nihil   of 11051
 
e*trade won't let me write naked calls, although I've done it several times by mistake -- they really get pissed and make me cover, limiting my profit terribly, but I sell, or leg into a spread depending on which is more profitable. They say "your account is not" suggesting that someone else's may be. But uncovered short calls have unlimited potential for loss, no one can have enough margin to guarantee the broker against loss, so when they execute a uncovered short call for you they are taking on an unlimited contingent liability for them, and they don't like that at all. A rich broker (like MER) will have enough invested in the stock to take a flier on its own. But e-brokers usually have little capital, and probably are not interested in gambling for the tiny commissions and spreads that they can earn. I know of brokers (like MER) that will let you trade options in an IRA, but etrade and waterhouse won't. Different strokes ....
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