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

To: profile_14 who wrote (86182)	6/12/2007 2:38:05 PM
From: miraje	Respond to of 206325

Thanks for your response. I may indulge in a bit of this in my portfolio. Regards to you, -JB

To: profile_14 who wrote (86182)	6/12/2007 2:52:06 PM
From: ChanceIs	Read Replies (2) \| Respond to of 206325

>>>I have Level 3, which allows for naked put writing, but I seldom use it.<<< I do business with Schwab as well. I just found out today that you can write "cash covered puts" in a Level 1 account. A cash covered put is basically a naked put except that your broker will have reserved CASH (not room to borrow using margin) to "clothe" the put - i.e. to fund the purchase of the shares with cash at the strike should the put be exercised against you. Basically it restricts the use of all margin borrowing in the account and then some cash for as long as the "cash covered put" exists. I was advised that this will work best in a cash account - obvious. In a margin account, if it bounces online you would have to call a broker and then they would allow it. For spread WRITING Schwab will reserve the full margin requirement for the short leg if the short leg expiry comes after the long leg - e.g. long July calls but short August calls. If you were long the August calls but short the July ones, they would require only the width of the spread to be withheld in cash.