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To: Jeffry K. Smith who wrote (483)1/2/2000 2:09:00 AM
From: taxman  Read Replies (1) | Respond to of 8096
 
i had been dealing with etrade and they told me i would have to have the cash as in the example i cited. in that case i exercised (the stock was about double the strike) and was never bothered with a margin call.

i think the rule is as i stated--no recalculation--but i'm not sure. i'll try to call the head of the margin department at dreyfus on monday and i'll let you know what he says.

has anyone else faced this issue?

regards



To: Jeffry K. Smith who wrote (483)1/2/2000 2:18:00 AM
From: taxman  Respond to of 8096
 
one further point. as far as i know if you buy a stock for 100 and the next day it rises to 200, you still, according to my understanding, have to come up with 50 in cash.

if so wouldn't the same principal apply where the market of the underlying is twice the strike?

regards



To: Jeffry K. Smith who wrote (483)1/2/2000 9:11:00 AM
From: Poet  Respond to of 8096
 
Jeff,

Head cold or not, that was a very good question, one I'm not sure the answer to either. I'll call Waterhouse this week and ask.

Thanks, taxman, for the post on exercising. That's exactly what I've been doing too. :)


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