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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study!
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To: Herm who wrote (4079)8/22/1997 4:38:00 PM
From: Zach E.   of 14162
 
A note on naked put writing:

E*Trade now allows it. They just changed their policy, and here are
the details given by customer service in an email:

>>>
To write naked options the account needs to
be approved for level 3. This allows uncovered writing, however
there are certain requirements:

1) 40% of the underlying market value(+) the premium (-) the
out-of-the-money amount.
(Example: 1 contract, 1 point out of the money=$100.00)

or

2) 20% of the underlying market value (+) the premium.

E*Trade is committed to providing quality customer service to all
our customers. If you have any further questions or suggestions,
please feel free to email us at service@etrade.com, or call
1-800-STOCKS5.

<<<

I figured that there are probably some other E*Traders on this
thread, so this info might be helpful.

I didn't get any "minimum $25K equity" message, hopefully
that is not the case, or I will have to move on to Waterhouse
or somewhere else that allows this synthetic CC writing strategy
without a boatload of cash. Getting "Level 3" approval is enough
of a pain as it is..

Zach
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