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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study!
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To: Dan Duchardt who wrote (10722)5/11/1999 8:32:00 AM
From: Andeveron  Read Replies (1) of 14162
 
> We also know that writing a put is very different from selling
> stock short, with a well defined limit (the strike price) on the
> amount it will cost you to fulfill your obligation if the option is > ever exercised.

Hi, excuse the intrusion. Naked put writing is selling a position against air and opens you up to risk if the underlying stock tanks. However, if you hold the stock and write puts against the position, would this be considered covered put writing? I.e, the value of your stock is essentially the "collateral" for the put and you are essentially covered against losses by the value of your stock? Or does the brokerage require that the writer deposit an cushion of money against losses if the put strategy goes against the writer? Thanks for any help in this matter as my broker won't allow my account to write puts even though we have the underlying stock in the account.
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