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Technology Stocks : America On-Line: will it survive ...?
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To: Michael Strope who wrote (3047)5/8/1997 1:41:00 AM
From: chenys   of 13594
 
There are three levels: (1) covered calls or puts, (2) + calls and puts (buy to open), (3) + naked call (dangerous-as stock goes to heaven) and puts (limited loss-as stock goes to zero)-all sell to open, like short options.

You need to have buying power at all time in naked options. Covered ones need unlerlying stocks (long or short).

Usually, firms don't wnat clients to lose money and sue them.
besides, as clients lose money the firm lose assets too.
Most people lose money on options, to be sure.

If you successfully trade for a year or so, they may upgrade your level. Or if you put in enough money.
Remember, option trading commission and spread can eat you up quick.
Be sure that stock can move 10% in your direction in time before taking action otherwise the risk/return ratio is too high.
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