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Strategies & Market Trends : Options
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To: taxman who wrote (584)1/3/2000 4:13:00 PM
From: edamo  Read Replies (2) of 8096
 
taxman re: "option-al rules"

believe it is your brokerage. if the option is the only position, the only rule that holds true is the option is not considered marginable. you cannot borrow against the option as it is not considered secure and tangible. the conversion or exercise is a natural. let's say you have two contracts in which the underlying has doubled. sell one, which generates the cash to exercise the other. now you have a security that can be collateralized fully for margin borrowing. you can in fact, if you so desire use the margin to buy calls or puts or whatever....seems simple to me...

if you only hold one contract, that can be reason for dreyfus to ask for an equity position.....
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