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Strategies & Market Trends : The Options Box -- Ignore unavailable to you. Want to Upgrade?

To: Jeff Jordan who wrote (10471)	4/18/2001 5:09:44 PM
From: Wayners	Read Replies (2) \| Respond to of 10876

Oh now that is very interesting. They give you the old margin call. And if you don't meet the call, they liquidate the stock position from the exercise for you--probably at the worst price sometime in during the week after the expiration of the options. I also suppose its not a maintenance call either. Its probably a Reg. T call for failing to put up 50% of the value of the stock upon purchase so if you don't meet the Reg. T call I bet they close your account too. Failing to meet a Reg. T call is essentially breaking the law, unlike the maintenance call.

To: Jeff Jordan who wrote (10471)	4/18/2001 6:29:02 PM
From: KFE	Respond to of 10876

Jeff, The brokerage firm rally does not have any choice but to send you such a notice. However, it has been industry practice to let customers unwind an exercise/assignment by allowing you to sell/buy the contra side of an exercise/assignment Monday morning without generating a Reg T call. Your firm does not have to allow this but to my knowledge almost all do and your's probably does too even though they sent you that message. There was a rule that limited this to something like four times a year but I am not sure if it still exists. If you get a Reg T call your account will become restricted for a period of time. Regards, Ken