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Politics : Formerly About Applied Materials
AMAT 256.40+1.2%3:59 PM EST
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To: mitch-c who wrote (39013)10/31/2000 2:18:32 PM
From: Tito L. Nisperos Jr.  Read Replies (1) of 70976
 
Mitch-c, the Bottom line is that if you Re-Apply to add more Options trading capabilities that are allowed by law on IRAs, you have to answer correctly this "trick" question included in the application form that says something like, "What is your Objective in Options trading?" Is it for "Income" or for "Speculation?" Now, there's no harm to check "Speculation" even though you just wanted to Write Covered Calls --- a strategy that is considered not risky. If you select "Income," of course the broker interprets it that you do not like to Buy to Open then later on to Sell to Close Calls and Puts whether they are LEAPs or not, Equity or Index Options, simple Spreads like buying Calls and Puts simultaneously or not (sorry no writing of Puts or Naked Options)--- all strategies that falls in the category as Risky to one who just wanted some Income while holding the stock for a while.

Also, the Broker does not Approve automatically the Options capabilities you like --- you have to apply for them, then he will decide whether you deserve to be approved or not. And if you are denied, the Broker just tell you they "are unable to approve your application this time"; the reason? --- you have to guess for yourself. The reason could be just a matter of selecting "Speculation" over "Income."
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