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Technology Stocks : Qualcomm Incorporated (QCOM) -- Ignore unavailable to you. Want to Upgrade?

To: eikos who wrote (51264)	11/21/1999 1:06:00 AM
From: Ruffian	Read Replies (1) \| Respond to of 152472

<I believe call buying is permitted in retirement accounts even though calls can and do most times, expire worthless. You could take your entire retirement account and buy the 400 calls on QCOM next month and end up at zero if the stock closes at $399. Out in the street. Penniless. Broke. Next stop Hobotown.> I hope not! <gg> Ruff

To: eikos who wrote (51264)	11/21/1999 7:05:00 AM
From: Jill	Respond to of 152472

More on options: curious how often it has happened that you've been put. I use margin collateral for selling puts also, but have never been put yet, because I purposely sell below the current trading range. Thus on Monday I sold Nov 320 puts. Theoretically it could've gone below 320, but it seemed highly doubtful. If I'd sold 350 or 350 I'd have gotten a higher premium but definitely a bigger risk being put. So how often do you purposely try to get put? If Qualcomm is on a tear, will you always write covered calls on those 100 shares you were put? I don't understand that strategy as a hard and fast rule. You might use the premiums from the covered calls to slowly reduce your margin debt, or calculate the difference between your margin rate (6 or 7%) and Qualcomm's rise. If the latter was more, wouldn't you want to keep the shares for the time being? I think they let you buy calls in a retirement account because the worst that can happen is you lose your $--they're not responsible and neither is the government. Theoretically if you wrote puts on a stock that was at 400 and it tanked to about 20, you might not have the $ to come up with to pay for the stock that was put to you. Jill

To: eikos who wrote (51264)	11/21/1999 11:09:00 AM
From: jmac	Respond to of 152472

It's not a dumb law. Think about it. You write a put. You meet the margin requirements to do so. The stock gets put to you but you don't have enough money in your retirement account to buy the stock. How do you buy the stock. You can't arbitrarily contribute money to a retirement account. So, it just can't be done. Not dumb, very logical. That's why you can't margin stock also. You can't meet margin calls in retirement accounts. Call buying is permitted because all you can do is lose your own money. Call writing against stock you already have in your retirement account is allowed because all that can happen is that you lose the stock that already is inthe account.