Selling Puts: Have Cash Will Travel Message Board

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Strategies & Market Trends : Selling Puts: Have Cash Will Travel

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To: Tom K. who wrote (1041)	1/25/2000 9:32:00 PM
From: David Lind	Read Replies (1) of 1235

Tom, sorry to have been confusing in my response. That's why I have a Masters Degree in Communications, so that I know how to be truly oblique. Yes, I am referring to the 90% of T-Bill collateral. My logic is that if I am going to sell puts in margin, I'd like to have the collateral in a solid state, at least for the time being. Solid as in unmoving and guaranteed. As you know, Brown has a 20% requirement of the underlying for each trade (plus premium minus OTM, etc.) With T-Bills in place giving me 90% collateral, I figure I should have plenty of room to place way OTM strikes and still generate good income. My calculations show that I should be able to do that and still use only 50-60% of the margin collateral. At least that's the plan. Have I still been confusing? -David

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