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Politics : Ask Michael Burke

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To: Bill/WA who wrote (83437)	9/3/2000 11:28:08 AM
From: Knighty Tin	Read Replies (2) of 132070

Bill, Cash from covered call writing is cash just like money you deposit into the account. It is not like short sale cash where it is segregated to guarantee delivery of the stock at the termination of the short. Basically, the premium goes first to offset any margin debt and secondly into your money market account. You can spend it, or, as I almost always do, put it into another hedged position, compounding my return. Short puts is a different game, as that creates a margin obligation and you are not as free to spend it. However, it should still earn MM interest. Brown & Co. pays the lowest interest in the industry, though they also have the lowest stock commissions.

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