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Strategies & Market Trends : Options for Newbies -(Help Me Obi-Wan-Kenobe) -- Ignore unavailable to you. Want to Upgrade?

To: margin_man who wrote (650)	2/1/1998 10:18:00 PM
From: ----------	Respond to of 2241

Patriot: The only time you would be asked for additional collateral, (e.g. a margin call) is if when you fell under maintenance requirements. Some firms use 30% some 50%. It is unwise, IMO, to extend oneself anywhere near the 50% limit. It is extremely unwise, IMO, when dealing with a deep discount firm. They are working on a thin profit margin. An account that is constantly at or near 50% & keeps getting margin calls is a real time consuming pain in the can. I know a couple guys that have been told "no more margin trading until you get $xxxxx.00 in your account." Personally, I rarely ever actually get below 100% collateral. Not that my account is big, I just limit myself. 90% is my personal max all out self-imposed limitation. When one sells a put, the only way to sell covered, is sell in an account with cash or borrowing power equal to or in excess of the value of the stock that can be put to you. If I sell a TBR 100 put, I'm obligated to receive $10,000.00 in stock. As long as I have over $20,000.00 in securities, I'm 100% covered. No Margin, no costs. (That would be the bare minimum.) Because TBR is volatile, IMO, I will sell one put for every $40,000.00 in securities. I own the securities, they are just sitting there in my account. It is simply my way of making my money work a little harder for me. My way should not be misconstrued as implying it should be anyone else's way. If TBR gets put to me, I'm going to start paying interest on $10k. Doug