Re Fidelity and puts
You have to be Level 4. Their requirements are not that stringent in terms of huge account $ for naked options. You can also specifically talk to the branch manager and "put" your case to him and it should work.
However, they are strict on what they hold as collateral, and it's a bit frustrating and hampers your ability to move. In addition to their various formulas (I can't even remember--there are 3 possible formulas, they take whichever is highest each day--it usually ends up being the one that holds 30% of the underlying plus the amount of the premium you received, plus...I can't remember) they set aside 1k for each put contract sold as well, and 10k for naked call sold; in addition, they have an 80% margin requirement on all internet stocks (including CMGI, which for me is a drag), so if for example as I did you sell put on CMGI, and CMGI skyrockets in near future, it generates you relatively little extra margin capacity, while the amount held against your put increases substantially (i.e.--30% of underlying...the underlying might go up a lot)...thus you have to mentally set aside much more for the swings on such a stock
That wouldn't be nearly the case with Dell...
In sum, they're not bad, but they're not great. |
