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Strategies & Market Trends : Selling Puts: Have Cash Will Travel -- Ignore unavailable to you. Want to Upgrade?

To: taxman who wrote (1081)	1/27/2000 11:17:00 AM
From: OX	Read Replies (2) \| Respond to of 1235

% of the underlying (plus the prem rec'd) ken posted on the 'spreads' thread that they were revamping the 10% rule so that's it will be a 10% flat of the underlying (currently it's a little more complicated). so basically it's (anyone feel free to correct me as I despise dealing w/ margin, SMA, buying power calcs)... sell 10contracts DELL 40P, you have to keep between 4k and 8k in margin v important and cheap, just MARGIN some ppl keep this in tbills, others cash. i keep it in a combo of cash and either SPY or DIA. i flip in/out of SPY/DIA/cash enough that I do better than tbills alone... it doesn't take much effort since I already track the indices to death :-) the way the old rules were before w/ 10%, you could actually have to add margin if your NP became way OTM (Rose on the qcom thread had this very problem... you probably read about it), but w/ the new RegT, this problem will be eliminated. the above is for equities (and narrow indices). for broad-based index options it's only 15% max (min 10%). interest rate options 10% (min 5%) gotta love the cboe site... i did a best guess at the url and hit it right the first time :-) cboe.com somewhere in there is the margin manual i imagine.