Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: williams123 who wrote (40055)	3/10/2005 5:09:53 PM
From: Tommaso	Respond to of 206223

If I may reply, to trade puts and calls you complete an interview with your broker showing your assets and your trading experience, and depending on your position you are allowed to engage in various kinds of trades. Discuss it with the broker.

To: williams123 who wrote (40055)	3/10/2005 6:26:37 PM
From: kodiak_bull	Respond to of 206223

W-123, You need to get option documentation from your broker to get qualified to trade options. It's not that difficult. I'm not sure if it's a margin account or not, I think it's a different species of qualification. Simply buying puts and calls is the simplest and most basic level of options. It doesn't take much to convince your broker that you should be permitted to buy puts and calls (some places I think this is call Level 1 trading or something like that). The next highest level is selling covered calls. From a capital point of view this is actually a risky prospect (same risk curve as selling naked puts, actually) but it is generally also a low level options trading level. I guess the low level of risk is to the broker, not to the account holder. Next up on the food chain is usually the trading of more complicated strategies such as spreads, straddles, strangles, condors, etc. Interestingly, trading spreads has a better (that is, less risk) risk curve than selling covered calls, but the brokers don't see it that way. Finally selling options "naked" is the highest level of trading and requires not only convincing your broker (on paper) that you have the experience to go naked, but often $100,000 in your account as well (OptionsXpress has this $$$ requirement). Sometimes selling naked puts is an attractive methodology, but you can often derive a lot of the benefits from selling options by simply spread trading. Kb