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Strategies & Market Trends : The Covered Calls for Dummies Thread -- Ignore unavailable to you. Want to Upgrade?

To: Dan Duchardt who wrote (2765)	10/16/2001 11:36:27 PM
From: JohnM	Read Replies (1) \| Respond to of 5205

I don't believe you can sell stock short in an IRA under any circumstance. To sell short you must borrow stock from the broker, and the broker cannot lend you assets in an IRA. Exactly my understanding before I got this most recent note. I've e-mailed him. Should have something by morning. Thanks for the thorough response. John

To: Dan Duchardt who wrote (2765)	10/18/2001 5:08:21 PM
From: Allen Furlan	Respond to of 5205

FWIW, on subject of selling cash covered puts in an IRA. Depending on your broker you can also use treasuries at 90% of value if note/bond is less than one year to maturity. I am not sure of the rules but my guess is that short term treasuries are immediately redeemable without same clearance procedures as stock. In any case for those who wish to generate income and do not wish to incur large risk the strategy of selectively selling puts for low price but high value stocks(relative to price and fundamental financial metrics). is certainly worth consideration. I only have two such positions in my IRA currently but they serve as good examples. MWYWU at .55 on 5/30 was in my opinion very low risk. Stock was at 13.5 or put was 45% out of money. The .55 in 6 months earns 7.5/(7.5-.55)=8% in 6 months or 20% when combined with treasury yield. Higher risk was DUPVU on 4/01 with stock at 10 with put at 1.375. Annual return at about 48% but much higher risk. In both cases I selected these stocks after considering postings on the value thread. Many of the strategies on this thread are designed for traders but there are also opportunity for conservative investors in covered call and covered put trading..