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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: StockHawk who wrote (43544)	6/15/2001 9:17:23 PM
From: Mike Buckley	Read Replies (2) \| Respond to of 54805

StockHawk, Since certain call positions can have "unlimited" downside, you can not use them in a "limited" account like an IRA. You're right, of course, but the flaw in that logic is that it applies only to certain call positions. Yet the brokerage firms do allow trading of certain other call positions (covered calls) that don't pose the risk you mention regarding the limited ability to fund an IRA. There's simply nothing related to the limited ability to fund an IRA that applies to the purchase of a naked call or put that doesn't also apply to the purchase of common stock. If you make as many telephone calls as I did to the borkerage firms (more than 20) and ask why the firm has a policy preventing the purchase of naked options in an IRA, you'll likely get the answer I did -- that it's because of rules posed by the federal government. Only once did I get the truthful answer that it's simply the firm's choice, which in my mind is a reasonable business option for whatever reason a company chooses it. I just don't understand why all the other firms have such a compelling reason to lie about it. I'm sure most of the people who aren't telling the truth don't realize that's the case; they're probably passing on the information that was passed on to them by their superiors' superiors. I'm sensitive to this point because in the first six months of my business career I was put in the same position, learning a new industry from a bunch of thieves who were happy to teach the young members of their sales staff a pack of lies. As soon as I realized what was happening, I left the firm. --Mike Buckley