<< when I attempted to exercise a call at Fidelity, they had trouble finding anyone there who knew how to do it.>
Craig: I understand your concern. I've spoken to brokers in the past who had a difficult time understanding the sale side of calls and puts. I believe that brokers want to avoid options because it infringes on their commission revenue. For instance, selling a put when the cash is available for coverage, is no different than selling a covered call. However, most houses insist that you have years of experience before you're allowed to initiate a put sale.
When a short put is initiated, the commission is lower than actually buying the stock. Additionally, no margin is involved, This is probably a loosing deal for the broker.
Fidelity, Q&R, Schwab, will not allow you to sell puts in an IRA. Does anyone know if this is a SEC requirement or a local practice? Would appreciate a response. I got into it with Fidelity and they claimed that it was a rule of the IRA. However, the woman I spoke to had difficulty understanding the sale of put/call concepts.
Mike |
