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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study! -- Ignore unavailable to you. Want to Upgrade?

To: J.B.C. who wrote (9566)2/3/1999 9:52:00 AM
From: VincentTH  Respond to of 14162
 
Jim,

The question was not addressed to me, but I believe you omit one very important point: What you described is called a spread and it is not permitted in IRA accounts in most brokerages. For taxable accounts, you need a margin account for spreads. Some brokerages require a margin requirement on spreads ($2000 at Brown, $10,000 at Fidelity for the first spread), yet others like Waterhouse don't require any margin, and treat spreads as covered calls for margin requirement. (By margin requirement, I mean the money that is subtracted from your Stock Buying Power in your margin account).

//V



To: J.B.C. who wrote (9566)2/3/1999 12:31:00 PM
From: Herm  Read Replies (4) | Respond to of 14162
 
Jim,

When I originally asked them they indicated no problem. I tried to execute a few spreads and they changed their minds saying they would consider it naked therefore no go! That is why I'm taking my options business somewhere else! Vincent is right about not being able to spreads in the majority of IRA accounts. There was only one if I recall that claimed IRA options and spreads allowed.


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