How To Write Covered Calls - An Ongoing Real Case Study! Message Board

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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study!

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To: mc who wrote (8188)	8/11/1998 4:12:00 PM
From: Zach E.	of 14162

Selling cash-secured puts.. 1. Is this really an uncovered position? No, as long as the cash is maintained. In fact, selling puts with cash to cover the stock is almost identical to selling covered calls, as pointed out by McMillan. However, selling puts is considered "dangerous", while selling covered calls is "safe". Stupid, but what are you going to do.. Unfortunately, your broker is allowed to set whatever rules he/she wants. The big minimum balance is definitely not unheard of. do you know of a broker who allows this kind of trading? E*Trade allows one to sell puts, if you get "level 3" approval. There is no minimum balance for this, and I've been approved for it, although I haven't actually sold any puts yet. Ironically, selling "covered puts" (where one sells puts versus short stock) only requires level 2 approval, and is equivalent to selling naked calls! Zach

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