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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study! -- Ignore unavailable to you. Want to Upgrade?

To: rrufff who wrote (11029)	6/12/1999 4:10:00 PM
From: Greg Higgins	Read Replies (1) \| Respond to of 14162

rrufff writes: Do they limit online writing of puts. I have been annoyed that other brokers do not allow that even though it is a relatively conservative approach. If you read edreyfus.com you'll see that they'll even allow the writing of uncovered call if your account is approved. However, note that Customers engaging in uncovered (“ naked”) equity options transactions should be aware of the following rules: $20,000 minimum equity, consisting of either marginable securities or cash, is required in the customer's account prior to the execution of any naked equity option transaction; and, with regard to each individual naked equity option, DBS requires that the customer, in addition to the minimum equity requirement indicated in the preceding section, have equity in their account equivalent to 50% of the current value of the underlying security plus the current option premium, with no offset for options currently selling “out of the money.” You get what you pay for, I suppose. I costs me $36-$60 to trade 6-10 options at B & J. But, I'm only putting up exchange minimum margins even when I'm naked. I don't go naked much in calls any more, but with LEAPS spreading, a good tactic for a large position is to only cover some of the position when the stock is down, and to overwrite when the stock is highly priced. See Roth Chapter 29. I'm frequently naked in puts.