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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: maceng2 who wrote (22725)9/28/2000 5:08:20 PM
From: XBrit  Read Replies (2) of 436258
 
Datek that said they only do "Long Options". I suspect that means I won't be able to buy poots on my long positions. i.e you have to own the stock to sell calls, and I presume you have to be short a stock to sell puts. i.e you can't buy calls (for example) unless you had the stock and sold calls in the first place. Similarly for poots. Do I have this right?

No, you don't have it right.

"long options" means you can buy puts or calls freely. As opposed to "short options", which means selling naked puts or calls.

The rationale is that selling naked puts or calls leaves you exposed to unlimited risk, whereas buying them long has a defined risk (100% of your investment).

Selling covered calls is less risky than any of the above, so most likely that's allowed also.

In other words, you can do what you want to do.
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